Martin Shkreli is back in the spotlight, and this time it's not for price gouging or securities fraud, but for his contentious handling of the Wu-Tang Clan's one-of-a-kind album, Once Upon a Time in Shaolin.
Shkreli originally bought the album in 2015 for USD$2 million, a move that instantly caught the public's eye. However, after his legal troubles culminated in a seven-year prison sentence for securities fraud, the US Government seized the album as part of a USD$7.4 million penalty.
In 2021, the album was sold to PleasrDAO, a digital autonomous organisation, for USD$4.75 million. PleasrDAO aimed to preserve the album as a unique cultural artefact and tied its ownership to a non-fungible token (NFT), which 74 members collectively own.
As it turns out, Shkreli made digital copies of the album before it was seized. In June 2022, he revealed during a YouTube livestream that he had stashed MP3 copies in safes worldwide.
Shkreli then began taunting PleasrDAO members, claiming to have played the album for thousands of people on his Discord and boasting about distributing copies to various individuals. He even hinted at the album's availability on torrents and hosted listening parties on his social media accounts, which reportedly reached nearly 5,000 listeners.
PleasrDAO has since filed a lawsuit against Shkreli, alleging that his actions violate the asset forfeiture order and misappropriate what they describe as "trade secrets." The DAO argues that by distributing copies of the album, Shkreli has diminished its market value and breached the agreement under which they purchased the album. They are seeking a federal court order to prevent Shkreli from further distributing or using the album’s contents and to obtain a list of individuals who have received copies.
Shkreli’s defence is straightforward: he claims that as the original buyer of the album, he legally owned 50% of its copyright and was entitled to make copies. He argues that the government’s seizure only pertained to the physical copy of the album, not the digital versions he had created beforehand. Furthermore, he contends that the album is no longer a "trade secret" since its contents have been widely disseminated.
On 26 August 2024, a federal judge issued a preliminary injunction against Shkreli, barring him from possessing, using, or distributing any copies of the album. He is also required to surrender all existing copies to his defence counsel and submit a list of individuals who have received them by the end of September 2024.
As the case progresses, it raises intriguing questions about the intersection of copyright, asset forfeiture, and intellectual property in the age of NFTs. While PleasrDAO and Shkreli prepare for a courtroom showdown, the broader implications for how unique digital and physical assets are managed and protected remain to be seen.
Written by Luke Misthos, Steven Pettigrove and Michael Bacina
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