Meme money: New currency wears sunglasses

Kanye West sues developers of new bitcoin-inspired Coinye West.

Since our article last month on JP Morgan’s patent application for a digital currency, the explosion of interest in bitcoin and other cryptocurrencies has continued to expand.  If you’re still wondering what cryptocurrency is all about, check out this simple explanation, then read on!

This week Sydney-based Alanna Skelly, whose son died of an overdose after taking drugs purchased online using bitcoins, opened a petition for the federal government to regulate bitcoin.  Bitcoin investors scared by the sad story of James Howells, who threw away an old hard drive containing the private access key to 7,500 Bitcoins worth approximately $7.5 million at Bitcoin’s peak in November, can now purchase a Bitcoin storage and insurance service called Elliptic Vault underwritten by Lloyd’s of London.  Dogecoin was released in late 2013, combining the features of Bitcoin alternative Litecoin with the fluffiest popular meme of 2013.  There’s even a website where the value of 75 cryptocurrencies can be compared, although most are worth only a fraction of a cent.

 

Source: Satoshi, via Wikimedia Commons: http://commons.wikimedia.org/wiki/File%3ABitcoin.png

The latest in this feeding frenzy of digital currencies is Coinye West (renamed to Coinye), inspired by rapper Kanye West, and originally featuring a face-on cartoon of Kanye wearing slatted sunglasses.  Kanye is not associated with Coinye.  The developers behind the currency were quoted in VICE as deliberately staying anonymous because they didn’t know what Kanye’s reaction would be.

Bad News

Kanye’s lawyers sent a cease and desist letter to Coinye on 6 January.  The makers of Coinye leaked the letter, changed the logo to “a half-man-half-fish hybrid who is wearing sunglasses”, launched the currency early and responded with their own letter, titled “Cease and Desist Sending Cease and Desist Letters” and which refers to fish several times.

An aside for readers who aren’t South Park fans (spoiler alert) – Kanye featured in the episode Fishsticks in which Kanye comes to believe that he is a gay fish.

On 14 January, Kanye and his company Mascotte Holdings, Inc, filed a claim in the District Court in New York, claiming trade mark infringement, cybersquatting, violation of right of publicity and unfair competition causing confusion or deceiving consumers (the US equivalent of an Australian claim for misleading and deceptive conduct).  Mascotte Holdings owns several US trade marks for KANYE WEST in relation to music, performance, posters, clothing, novelty buttons, online retailing, and has applied for trademarks for KANYE.  The defendants include the unknown creators of Coinye, Amazon.com as host of some of the Coinye websites, and Dogecoin as owner of several domain names including the name “coinye”.

Source: Tyler Curtis from Chicago, Illinois, United States (Flickr) [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons: http://upload.wikimedia.org/wikipedia/commons/7/71/Kanye_West.jpg

Coinye’s next move

It looks like the people behind Coinye have promptly abandoned it.  The Coinye website is now a single page notice “COINYE IS DEAD.  You win, Kanye.”  The more cynical members of Internet Coinye forums are saying that the original developers have cashed out their Coinye holdings and are calling the currency a scam.

Now, we ain’t saying that the creators of Coinye are gold diggers.  The currency might have been a prank or a nod to the artist from genuine fans.  On the other hand, if this was a “pump and dump” scheme, it looks like it has been pretty successful.  The developers pre-mined (held back from public release) a significant portion of Coinye coins, are quoted in the complaint as deciding to imitate Kanye “because he is and always has been a trendsetter, and he’s always keeping things unique” – implying that they intended to take advantage of Kanye’s popularity – and drew media attention to Coinye by releasing Kanye’s cease and desist letter to the public and sending their own humorous cease and desist letter.  What better way to attract miners to drive up the value of Coinye before trading out their own holdings?

We’ll be interested to see whether Kanye pursues the complaint to find out the identities of the people behind Coinye and pursue his claim for damages.  If he does, a parody defence to trade mark infringement might be available to the Coinye creators, but we think it would be a tough argument to make.  They would have to prove that consumers know that Coinye was a joke and would not be confused.  Kanye’s complaint quoted dozens of Twitter comments from people who apparently believed that he had endorsed Coinye.  The public could be forgiven for thinking that the rapper was expanding his empire to include cryptocurrency, especially since Kanye has trade marks relating to online retailing.

Interestingly, the website for Norriscoin (an unrelated alt currency mimicking Chuck Norris and scheduled to launch on 14 January) has also been taken down.

Is this just the first casualty in a lasting trend away from PayPal and credit cards, to anonymous digital currencies?  Or just another sign that cryptocurrency is a short-lived fad?  When added to the volatility of cryptocurrency values, the fact that the filing of a single lawsuit can take down a currency highlights the instability and risks of bitcoin imitators.

Either way, we’re calling curtains for Coinye.

About the Author

Kathryn Purcell-Hennessy
Kathryn is a Senior Associate in the Brisbane office and a caffeine addict. She spends most of her time at work outsourcing IT functions, buying and selling cloud services and drinking coffee. In her free time, she likes reading epic fantasy and crime novels over a latte, and exploring cafes around the world.
View all posts by Kathryn Purcell-Hennessy