The NFT Copyright Pandora’s Box Has Been Opened

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  • The NFT boom has brought with it the inevitable byproduct – crime
  • Original content is being tokenized and sold before the author is even aware it has been taken
  • How can the issue be stopped, and how responsible are NFT platforms?

The explosion in popularity of NFTs has brought with it the inevitable presence in the space of criminals who are tokenizing work that isn’t theirs and selling it before the actual author knows what has happened. Of course, being blockchain the payment cannot simply be reversed and the thief cannot be easily identified, making it easy for criminals to steal and sell work that isn’t theirs, potentially aiding money laundering. Is there anything that content creators can do to preserve their copyright, and what percentage of the blame lies with platforms?

Attributing and Enforcing Copyright

At the heart of the argument over NFT authenticity is the issue of copyright. Creators of works have the legal right to be recognized as the owners of that content (unless they sign it off to someone else) and therefore are the only ones allowed to benefit financially from their sale. Forging someone’s work or, in the case of NFTs, tokenizing and selling content without the creator’s permission, is illegal, and can in theory result in a prison sentence for the offender.

Copyright laws are different in each country but the principle is the same – if you made it it’s yours, and no one else can sell it. In some countries, such as the UK, the work itself (providing it is original) is automatically copyrighted in the creator’s name the moment it is made, with no need to file for copyright. Other countries however require awarding of copyright by the relevant body before it can be asserted in a legal setting. This means filing for copyright with the relevant copyright body and backing up your case with evidence before you are awarded the copyright. This is what Craig Wright is trying to do with the Bitcoin whitepaper.

The twin issues in the NFT copyright world are time and practicality. It is not practical for someone to file a copyright claim for every tweet they make or every gif they create, and if an NFT copyright case ever got to court this would likely not be used as an argument. Given that copyright claims can take years to go through the awarding process, this again renders the practice impractical. We therefore have to assume that the creator of the content (again, providing it is original) is identified as the owner the moment the tweet is published or the artwork uploaded and has copyright automatically applied to them on a global setting.

Catch Me if You Can

So assuming that a content creator is recognized as the rightful owner the moment they create something, what kind of protection are they getting from copyright thieves making money off their work? Back in the old days you could easily arrest someone for selling bootleg cassettes of newly released albums from the boot of their car, but minting and selling an NFT that isn’t yours takes just minutes and is conducted behind a computer screen anywhere in the world.

With the transaction taking place in cryptocurrency it is also very hard to identify the criminal, easing their passage no end. With hundreds of such transactions taking place on a daily basis, it is again impractical for the authorities to get involved.

Platforms Responsible for Authenticating NFTs?

The question then to be asked is are the platforms responsible? The likes of OpenSea, Rarible, and Nifty Gateway allow anyone to mint anything as an NFT, with no checks being done to confirm the authenticity of a work before it goes on sale. Again, this comes down to practicality – these platforms simply don’t have the resources to investigate the authenticity of every single NFT before it goes on sale, nor do they have the authority to confirm ownership in dubious cases. These are for law enforcement agencies to decide.

The question then becomes whether such platforms are facilitating criminal activity – for example, it would be easy to launder money through a bunch of someone else’s tweets sold as NFTs. NFT platforms will maintain that it is not their responsibility to confirm legitimate ownership of content before it is minted as an NFT, and as far as the law is concerned they’re right – after all, auction sites such as eBay aren’t responsible for making sure that items on their site aren’t stolen, so why should NFT sites be treated any differently?

Even if such rules were brought in they would be largely ineffective, except for services like Twitter or Instagram where authentication through the author should easier, and would bring the platforms to a grinding halt.

Community Action is Required

If content creators can do little to protect their copyright from being infringed and NFT platforms can’t be held responsible for ensuring that the pieces on their platforms aren’t stolen, who can we turn to? The answer is the community. It is easy for individuals to perform a reverse image search to see if a picture being sold as an NFT is the real thing, and the same goes for tweets and other written content.

As well as individual action we may well see groups forming that aim to protect content creators’ copyright, hunting down and reporting fakes out of a sense of duty to the space and its creators. We may see third-party services introduced that protect content creators to an extent, but this will only be sticking plaster over the issue. The problem of NFT copyright theft is only going to get bigger as the space grows, and with regulations likely to have very little impact in the long term, ultimately it is going to be up to the community to step up and protect content creators.