Bored Ape Yikes Club
What do bored apes have in common with a disgraced crypto platform?
Following the rash of lawsuits aimed at celebrity endorsers of SBF’s FTX, this week brought lawsuits against similarly-situated celebrities and influencers who pumped up Bored Ape Yacht Club’s NFTs.
Both the FTX and BAYC suits are just beginning, so I’m going to share some opening ideas here, first, in Today’s Esquire.
I see a massive difference between the FTX and BAYC celebrity endorsements. FTX was, though it seems ridiculous in hindsight, a respected crypto platform, seen as relatively safe and secure as measured by the incendiary world of cryptocurrency. NFTs, at least among the general public, are seen far more as a gamble, a hit-and-miss proposition that hit, is now missing, but might hit again – or not.
All of these lawsuits have one thing in common: the notion that a powerful celebrity/influencer knew or should have known that what they were endorsing was fraudulent.
Good luck with that when it comes to FTX. There’s no way I’m ever going to be convinced that Naomi Osaka, for example, one of the most honest and highly-regarded athletes in the world, shilled for FTX and knew or should have known (given the endorser’s level of experience and knowledge) that FTX would become, well, FTX.
With Bored Ape, that’s a different story. For someone such as Steph Curry, to very publicly recommend an NFT without at least some kind of caveat about its volatility (these ads are always all FOMO, no slow down and watch what’s up) is something that has the possibility (but still, I think, not the probability) of a significant legal risk window.
New Jersey lawyer Michele Finizio offers an excellent general caution about what we see coming across our media feeds and screens: “If an ad looks too good to be true, there’s a reason for that.”
It’s this kind of simple and honest advice that endorsers also need to keep in mind in the future. For any influencer lesding regular people to soend money on something – they need to step back and think about what impression they’re giving and whether the people receiving the messages are sufficiently savvy to understand that, hey, this is an ad, not necessarily an honestly slice of the realities of life.
I’ve said this before, but I firmly believe that part of the problem is U.S. advertising law. When I lived in Berlin, I remember how clear the law around advertising was there. Anything on social media needed to be clearly labeled as an ad, even if it was something as simple as someone holding a product. U.S. advertising rules need to catch up in order to protect people who clearly need more protection, especially as we get into slippery spaces such as crypto.
I’m going to be writing and speaking more about this issue in the days and weeks to come.
How Not to Get Paul Whelan Home
I have given dozens of interviews this year on the Brittney Griner situation, including several this week in which I contrasted Paul Whelan’s ongoing detention with Griner’s release.
What has become evident over the past week is that Russia was simply unwilling to include Paul Whelan in a prisoner swap at this point. The most reliable reports from the U.S. government indicate that it was a one-or-none situation. The Americans didn’t have the option to secure Whelan’s release along with Brittney Griner’s, no matter how much the American public wants to see Paul back home.
As CNN reported, this week, the United States escalated tensions with Russia by charging five Russian nationals and two U.S. nationals for allegedly conspiring to violate U.S. sanctions by smuggling American-made equipment to the Russian military. While four of the Russians remain at large, one is in U.S. custody.
Of course, Russia will say that the charges are meritless and the one Russian in custody, Vadim Konoshchenok, is being wrongfully detained.
What this week’s events really do is place the lives of Americans in greater danger who still live in, travel to, or do business with Russia.
We can say whatever we want about how we are simply playing the game by Russia-established rules, but the chances today of another American being wrongfully detained in Russia are markedly higher than they were before the United States filed these charges earlier in the week.
Believing that this would be a linear way to secure Paul Whelan’s release is a real stretch.
If the “Merchant of Death” Viktor Bout wasn’t a worthy enough trade for Mr. Whelan, what volume and combination of Russian detainees will it take? How many Russians would the United States need to detain (each detention would be decried in Russia as an illegitimate act of aggression, just as Brittney Griner’s was in the U.S.) before Russia agrees to return Whelan – and how many more Americans would Russia detain in the interim?
The far more intelligent question to ask is why Russia is unwilling to part with Whelan at this point. Perhaps he is seen as the ultimate pawn – one they want to keep on Russian soil at any cost as some kind of insurance policy. Perhaps there are elements of the Whelan case that we just don’t know about but government officials do. We as the public simply don’t know what we don’t know.
We don’t have verifiable, tangible, valid answers as to why Paul Whelan will soon enter his fifth year in Russian custody and, without those answers, we believe that American authorities may be operating in the dark, which is a poor foundation for successful diplomacy.
As Attorney Nancianne Aydelotte points out, “Everyone would love to see every American detained in Russia to come home and tomorrow isn’t fast enough for it to happen.”
That admirable sentiment is the best and most we can all do. We need to keep Paul Whelan’s case in the social and transitional media spotlight so that, in a seemingly endless news loop, he doesn’t get lost.
As a footnote, there was a least a little bit of good news on this issue on Wednesday and Thursday.
First, we learned that a U.S. citizen detained since June by the Russians had been released.
Second, we actually did the right thing and put a lot more pressure on Russia by imposing more sanctions on their oligarchs. By hitting Russia hard and often with sanctions, as close as possible to Putin’s inner circle, the more the U.S. can use this for leverage.
Did Jack Dorsey Commit Perjury
This week I wrote and spoke, at some length, about Elon Musk’s “cleansing” of Twitter and whether Jack Dorsey committed perjury in front of Congress.
The tl;dr on this is: LOL and yes.
The LOL is because while Elon Musk is holding himself out to at least the Twitter world as it’s savior, his behavior is that of someone trying to drive the company into bankruptcy. Google my name and his together for longer explanations of this thesis.
The yes is a simple yes. It’s crystal clear that when Jack Dorsey testified in front of Congress in 2018 and was asked whether Twitter shadow-banned some (read: mostly high-profile conservative) users, he said no and, in so doing, committed straight-up perjury.
New Jersey criminal lawyer David Gelman highlights the key legal issue here: “Failure to tell the truth when testifying before Congress is and should be a criminal matter. Perjury is covered by U.S. Code Sections 1621 and 1001 of Title 18, which may be relevant here.”
In Dorsey’s case, the 2018 testimony that went viral this week would fall under Section 1621, which specifies that anyone who takes an oath and then “willfully and contrary to such oath states or subscribes any material matter which he does not believe to be true” is guilty of perjury. Whether under oath or not, the penalty for committing perjury in congressional testimony is up to five years in prison and a fine.
BigTech executives lying to Congress seems to be practically an hourly occurrence these days. But Twitter (both the classic Twitter and the new extra-caffeine Twitter) is being examined under a lot of microscopes, so Mr. Dorsey might have his small daily meal and bite of chocolate interrupted by a subpoena at some point soon.
Our response to this shoukd finally go beyond a collective ennui. If we are going to have our legislators take the time and effort to hold hearings designed to discover the truth about the people who run BigTech or BigPharma or BigCrypto, these inquiries need some bite as well as the usual amounts of bark.
Why the LTA Fines Are Misguided
This week, England’s tennis governing body, the Lawn Tennis Association, was fined approximately $1 million by the Association of Tennis Professionals, the men’s professional tennis tour. This follows a similar fine by the Women’s Tennis Association, the women’s pro tour.
This all happened as a result of the LTA banning Russian and Belarusian players during last summer’s Wimbledon. As we remember, the ATP and WTA responded to those bans by removing your points from the tournament. So, Wimbledon essentially became a glorified exhibition still flush with the usual cash.
As I wrote in Boxscore News, this has been badly mishandled by every party. These fines are going to ultimately hurt tennis players, because of the LTA eventually has to pay out anywhere near $2 million, it will impact their ability to offer all of these tournaments and support players, particularly in their junior and developmental programs.
John Lawlor, a Florida lawyer and tennis fan, noted that, “There is no doubt that while Russia might have lost face by having these athletes excluded from Wimbledon and the other UK tournaments, the athletes themselves were the ones who were more impacted, and directly hurt.”
We need to realize that every sport has a unique nature when it comes to international co petition. The World Cup, for example, which wraps up this Sunday, is clearly a national competiton. So is the Olympics. But no one would ever attempt to argue that the NHL is a national competition, though over one-third of NHL players were born outside the U.S. and Canada.
Tennis players are independent contractors. Where they’re from shouldn’t matter at all. They shouldn’t be penalized or rewarded for the action or inaction of the nation in which they were born.
We are going to run into this all again in 2023. With the WTA and ATP wishy-washy about their future operations in China and the emergence of China born, raised, and trained tennis stars, particularly on the women’s tour, how the sport treats a nation that is a bad actor might be a generational question.
SBF Finds Out
This week, FOMO became FAFO for Sam Bankman-Fried
Earlier this week, I wrote about some of the points of intersection between SBF and Elizabeth Holmes, arguing that there’s a strong case to be made that he is indeed the worst possible version of her.
While the notion of SBF in a Bahamian jail cell sits well with many people, what doesn’t is why he was arrested the day before he was scheduled to self-incriminate – I mean testify before Congress – in a virtual hearing.
He was scheduled to follow new FTX Titanic captain Mr. Fox, the Enron cleaner-upper trying to perform a similar role. After what we saw on Tuesday from Fox, just imagine how much more liability exposure SBF would have had if he actually testified for, say, six hours before Congress.
Why we were deprived of this very fine TV show and prosecutors self-deprived themselves from this information is a puzzle I can’t figure out, unless SBF was such an immediate flight risk that they needed to begin these legal machinations exactly when they did and get him into custody.
As Attorney Michael Epstein noted, this is simply the first part of a long process for SBF: “If he actually does challenge his extradition to the United States, the process will, at an absolute minimum, run to mid-February.”
To me, one of the most interesting elements of the case, and one that I’ll closely follow for months to come, is how much involvement either or both of his parents, Stanford Law professors* (*who should have darn well known better) had in this case.
Rumors began to fly the social-spheres on Wednesday that they might eventually be charged as well, particularly as their level of help towards their son might have crossed the line from merely personal to professional.
I was on NBC News on Wednesday night to briefly comment on all of this. Much more to come.
NOTE: The Week In Review Is Going to See Santa! Back After the Holidays!
About Aron Solomon
A Pulitzer Prize-nominated writer, Aron Solomon, JD, is the Chief Legal Analyst for Esquire Digital and 24-7 Abogados. He has taught entrepreneurship at McGill University and the University of Pennsylvania, and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. Aron has been featured in Forbes, CBS News, CNBC, USA Today, ESPN, TechCrunch, The Hill, BuzzFeed, Fortune, Venture Beat, The Independent, Fortune China, Yahoo!, ABA Journal, Law.com, The Boston Globe, NewsBreak, and many other leading publications.