When An NFT Is Stolen, Does Its Thief Officially Own It?

If the world of non-fungible tokens (NFTs) wasn’t complex enough, here’s more food for thought. 

Following the theft of actor Seth Green’s Bored Ape Yacht Club (BAYC) NFT, lawyers are now discussing the legal ownership of the virtual assets, and if having them stolen means the thief gets the rights to the digital image. 

In this particular case, BAYC has a different take on the licenses of its NFTs, in which each purchase allows the owner of the asset to use the digital art, even in commercial settings, which is what Green had planned to use his Bored Ape #8398 for in an upcoming television show. 

However, just days before the primate was set to make its big-screen debut, it was stolen.

Here comes the murky bit: Given that BAYC’s terms of service hand over the commercial license of the ape to the owner of the NFT, it’s now up for debate if Green is still entitled to use the image, which was purchased in good faith by another buyer after being offloaded by the anonymous hacker.

Mark McKenna, an intellectual property and privacy professor at the UCLA School of Law, told Bloomberg Law it appears that at the moment, the theft may have placed the entire program on hold, with the show’s producers “very reluctant to go forward” till the legal mess has been cleared up.

Furthermore, in the eyes of BAYC creators Yuga Labs, possession of the asset is deemed equal to ownership, which could mean the brand no longer sees Green as the NFT’s rightful owner, and thus will not bestow on him the right to use the Ape’s image commercially. 

While attorneys fight among themselves to figure out the answer to the question, this incident definitely depicts the complicated nature of digital assets and ownership, and the need to have a clear gauge of these regulations as the media heads further mainstream.  

[via Futurism and Bloomberg Law, cover image via Bored Ape Yacht Club / OpenSea]