With the Bitcoin and NFT bubbles continuing to grow, a new crypto-based company has hit the market looking to capitalize on the investment wave. Instead of investing in a business or product, BitClout offers users a new investment option that is described by its owner as a “new type of social network that lets [users] speculate on people and posts with real money.” Backed by some of Silicon Valley’s biggest investors, like Sequoia Capital and Winklevoss Capital, BitClout’s creators hope that it is poised to have a bright future.
However, BitClout is not without controversy over some of its current business practices, some of which may raise intellectual property concerns. To learn more about the possible legal issues posed by BitClout, keep reading this blog.
What Is BitClout?
BitClout users deposit Bitcoin into the platform in exchange for BitClout currency, or creator coins. The value of these coins is based on the reputation or popularity of the celebrity profile the user chooses to invest in. The more popular the profile, the more valuable the creator coin. In theory, if there is a new indie band that a user believes will break into the mainstream, the user can purchase the band’s creator coin now while the cost is low; as the band’s popularity increases, so will the value of the coins the user has purchased.
While users can deposit BitCoin in exchange for BitClout currency, there is currently no way for a user to cash out should they want to do so. The founder of BitClout hopes to have a currency exchange in the future but has no specifics on how or when they will be able to offer a cash-out option. BitClout appears to be a volatile investment, offering the potential for a quick rise and equally quick fall in investment value, with no way for users to cut losses and cash out.
Legal Issues Posed by BitClout
There have been questions raised about the legality of NFTs, cryptocurrency, and related digital assets on the blockchain. One point of controversy surrounding BitClout is their aggressive growth strategy, in which their network was pre-populated with profiles from the top 15,000 public Twitter profiles. Influencers like Kim Kardashian and Elon Musk had profiles created without signing up for or agreeing to the platform. While the founder of BitClout says this was done to prevent user impersonation or handle squatting, the company is currently using the private information of celebrities and influencers without their expressed consent.
One influencer, Brandon Curtis, has already served BitClout founder Nader Al-Naji with a cease-and-desist letter for using his personal information without consent. Curtis is arguing that it is the individual’s right to profit from his or her own identity, and to choose what organizations they collaborate with. Depending on the outcome of Curtis’ intellectual property case, it is possible that many of the other pre-populated profiles on BitClout will also seek to be removed from the platform.
Contact the California Intellectual Property Lawyers at Tauler Smith LLC
Tauler Smith LLC is a Los Angeles law firm that represents clients in intellectual property disputes, including cases involving copyright infringement. If you believe that you are a victim of a copyright violation, or if you have been accused of a copyright violation, our experienced IP attorneys can help you. Call or email us today to discuss your legal options.