Back in 2014, Kevin McCoy and Anil Dash whipped up the first NFT at a digital art conference. Fast forward to 2021, and McCoy banked $1.5 million selling that historic NFT, Quantum, at an auction. But six months later, a Canadian company called Free Holdings sued McCoy, saying they owned the NFT. đ¨
A New York judge tossed the case, saying the company didn’t prove ownership, bad intentions, or damages. Free Holdings argued that McCoy lost ownership of Quantum by not updating his records on the Namecoin ($NMC) blockchain in 2015, and they claimed it in 2021. For the auction, McCoy moved the NFT to Ethereum and said the original was “burned” when the registration expired.
This case brought the Web3 idea of “code is law” to the legal system.
In the crypto world, if it’s in your wallet, it’s yours. Not your keys, not your crypto.
But as McCoy said in federal court, “law is law.”
The judge considered how ownership works on the Namecoin blockchain and seemed to lean toward the idea that the NFT is the public key, not the token itself. With this view, Free Holdings just had a different NFT, not Quantum on Ethereum. The judge said the company was trying to cash in on the confusion around NFT ownership. đ¨