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Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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Meme Coin Chaos and Wild West of Viral Tokens
Crypto | Nov 26, 2024
Image: Jut a chill guy, Phillips Banks
Meme Coins, Lawsuits, and the Intersection of Tech, Culture & Finance?
Imagine logging onto social media and seeing your favourite viral meme like a cute pet or a celebrity's name turned into a cryptocurrency. At first it might feel like a quirky corner of internet culture but beneath the surface of the world of meme coins is arguably a ticking ticking time bomb with a growing number of legal disputes, ethical dramas, and financial volatility. Welcome to the latest iteration of the wild west of crypto.
What Are Meme Coins, Anyway?
Meme coins are cryptocurrencies that draw their identity from internet jokes or cultural references. Perhaps the most famous meme coin is 'Dogecoin'. What started off as a joke ended up making headlines with soaring market caps and high profile endorsements like Elon Musk. Meme coins thrive on social media hype but their value is driven by speculation rather than solid fundamentals. While that may be part of the fun, it's also where things go wobbly.
When Meme Coins Turn Into Legal Battles and Creators Fight Back
For example, an explosive meme coin called PNUT inspired by Peanut the squirrel (500,000 social media followers) who lived at Mark Longo's animal sanctuary in New York with Fred the raccoon. On Oct 30, state officials raided Longo's home and euthanized both animals due to laws against keeping wildlife as pets. The tragic death went viral and captured global attention during the U.S. presidential election with Elon Musk saying it was 'messed up' and DJ Vance citing 'government overreach'. Well Peanut's owner Mark Longo became furious when he found out that the crypto community had minted a coin based on his pet’s story. He called it exploitation and he fired back by launching his own token, "Justice for Pnut and Fred" and threatened a lawsuit.
See: Lena Dunham’s SBF Film & Finance Pop Culture
In another example, Caitlyn Jenner, an American TV personality and retired Olympic gold medalist launched her own JENNER meme coin and promoted it but it landed her in legal trouble. Investors claimed her endorsement led to massive losses and that the coin was an unregistered security. Sad outcome considering what looked like a quick way to cash in on her celebrity status eventually turned into a courtroom drama.
And then there is the artist behind the viral 'Chill Guy' meme, Phillip Banks, was pissed that his work was used in multiple meme coin projects without his permission. As a result, he's pursuing legal action to reclaim control over his intellectual property which is a good reminder that behind the hype and humour, creators and artists are getting taken advantage of and bearing the brunt of exploitation.
Phillip Banks:
“Chill guy has been copyrighted. Like, legally. I'll be issuing takedowns on for-profit-related things over the next few days.”
Why the Legal Storm?
See: Report Insights: DIY Investors in Canada on the Rise
While meme coins are all the rage because of their ability to capture cultural excitement, their value relies on viral buzz rather than actual utility or tech advancements. So meme coins are like a moth to a flame and their massive rise in popularity has created a perfect storm of legal challenges:
- Meme coins often use viral content without asking permission from the creators. This is intellectual property theft.
- Some meme coins are just 'scams and hype tricks' to get people to buy in, only for their value to crash later or a live rug pull, leaving investors with big losses.
- Authorities like the SEC are cracking down on meme coins that act like unregistered investments.
Closing Thoughts
Meme coin tokens are changing the way we think about value, culture, and technology but they shine a light on the cracks and darker corners of crypto where there's an obvious need for better safeguards, clearer regulations, ethics and accountability, and more informed investing.
See: U.S. Bets Big On Crypto and What It Means for Canada
They are a magnet for both innovation and controversy. Some meme coins will mature into legitimate assets but most will be the digital Wild West of crypto. Stay safe and be aware.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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