SEC Prioritizes Examination of Investment Firms for Adherence to Cryptocurrency Standards of Care

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David Leichtman, an attorney, claims that a brand is protected under trademark law by both  its name or emblem and “the value of the brand.” On Tuesday, developer and smart contract creator Thomas Lehman and Yuga Labs, the project’s parent firm, came to an agreement. The 10,000 NFTs in Ryder Ripps’ allegedly copycat project share the same names, characteristics, and features as Board Apes’ NFT. He claimed that Yuga Labs carefully framed its trademark complaint in order to concentrate on the usage of its name and emblem rather than the underlying ape art. If the underlying visuals were produced by artificial intelligence, NFT artists have not entitled to copyright those photos, he said. In fact, he explained, “what we have here is sort of a digital right, but it’s not an intellectual property right.” In addition, Rothschild “didn’t sell a tangible commodity, nor did [he] sell a bag, but [he] did sell the image of the bag as an NFT,” Leichtman claimed. If Ripps’ pictures “were just painted,” things would be different, Leichtman claimed.  

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If the businesses “followed their respective standards of care when making recommendations, referrals, or giving investment advice,” the SEC will investigate. According to reports, the SEC has recently been looking into whether registered investment advisers are adhering to custody regulations. These priorities for the examination division, according to SEC Chair Gary Gensler, who has long seen the majority of cryptocurrencies as securities that require registration, aim to safeguard investors “at a period of expanding markets, evolving technologies, and new kinds of risk.” According to a statement, the SEC will concentrate on investment firms that are registered with it and that offer or provide advice on cryptocurrencies. The regulator will ensure that these firms “followed their respective standards of care when making recommendations, referrals, or providing investment advice.”

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