A key ruling did, however, classify NFTs as protectable goods under trademark law. Meanwhile, Tornado Cash co-founder Roman Storm’s trial nears a turning point as prosecutors present evidence of his alleged control over illicit funds, with the defense preparing to challenge those claims. Separately, MIT-educated brothers Anton and James Peraire-Bueno are set to face trial over their $25 million Ethereum exploit, after a judge denied their motion to dismiss fraud charges.
Yuga Labs NFT Lawsuit Heads Back to Court
A US appeals court overturned a $9 million judgment that was previously awarded to Yuga Labs in its legal battle against artist Ryder Ripps and his business partner Jeremy Cahen. The Ninth Circuit Court of Appeals ruled that Yuga Labs did not yet prove that Ripps and Cahen’s “Ryder Ripps Bored Ape Yacht Club” NFT collection was likely to cause consumer confusion with Yuga’s original Bored Ape Yacht Club NFTs. As a result, the court sent the case back to a California federal court for trial, where claims of trademark infringement and cybersquatting will be reexamined.
Yuga Labs first filed the lawsuit in 2022, and accused Ripps of copying its high-profile NFT collection. Ripps, in contrast, claimed his work was satirical and intended to critique what he describes as racist elements in Yuga’s original artwork. In a statement, Ripps called the appellate ruling a “huge victory for artists who seek to make expressive meaningful work.”
Although the monetary judgment was reversed, the appeals court sided with Yuga Labs on a crucial point: it ruled that Yuga’s NFTs qualify as “goods” under US trademark law. This decision sets a legal precedent that could have far-reaching implications for intellectual property rights in the NFT space. The court also found that Yuga had trademark priority due to its earlier use of the Bored Ape Yacht Club marks in commerce.
Yuga Labs co-founder Greg Solano celebrated the recognition of Bored Ape NFTs as protectable trademarks and mentioned that the company is still committed to continue the legal fight in district court. However, while the court rejected the idea that Ripps’ use of the Bored Ape marks was protected by the First Amendment or constituted fair use, it insisted that a trial is necessary to definitively resolve whether the contested NFTs violate Yuga’s trademark rights.
Roman Storm Trial Reaches Crucial Stage
Another legal case is turning quite a few heads in the crypto space. US prosecutors in the criminal trial of Tornado Cash co-founder Roman Storm are preparing to rest their case, with key testimony coming from an IRS agent who linked Storm to control over funds sent through the crypto mixer.
IRS Criminal Investigation Special Agent Stephan George testified that he reviewed transaction records from Crypto.com and Binance, and claimed that Storm had control over crypto after it was transferred from a Binance account to Tornado Cash smart contract addresses. This conclusion was based on communications between Storm and his fellow co-founders Alexey Pertsev and Roman Semenov.
(Source: Bluesky)
The testimony followed a challenge from Storm’s defense team, who objected to earlier testimony from a scam victim named Hanfeng Lin. The lawyers argued that Lin lacked the expertise to credibly trace criminal proceeds or determine who controlled specific wallet addresses. They suggested that they may move for a mistrial, due to research indicating the stolen funds in question were not routed through Tornado Cash.
Storm’s ability to control or influence the behavior of Tornado Cash, particularly in preventing illicit use, is a central issue in the case. Another government witness was expected to address whether Storm could have altered the platform to deter criminal activity, but the testimony reportedly focused more on the platform’s response to government sanctions.
Roman Storm
Storm faces multiple charges, including conspiracy to operate an unlicensed money transmitter, conspiracy to violate US sanctions, and money laundering. Prosecutors said they expect to conclude their case by Thursday midday. Afterward, Storm’s defense will begin presenting its case, with plans to call two or three medical professionals and potentially an expert from blockchain analytics firm Chainalysis.
MIT Brothers to Face Trial
Meanwhile, two brothers educated at MIT, Anton and James Peraire-Bueno, will stand trial after a federal judge rejected their motion to dismiss fraud charges stemming from an alleged $25 million Ethereum exploit. The pair were charged in May of 2024 with orchestrating a sophisticated scheme to manipulate MEV (maximal extractable value) bots by exploiting how these bots scan the Ethereum mempool for profitable arbitrage trades.
Denial of motion to dismiss (Source: CourtListener)
According to prosecutors, the brothers used their deep technical knowledge to implement a rapid four-step plan—bait, block, search, and propagation. They executed the theft in just 12 seconds. They allegedly deployed 16 Ethereum validators, funded with over 500 ETH, to interfere with the blockchain’s transaction validation process and mislead MEV bots into executing trades in their favor.
In their defense, the Peraire-Bueno brothers claimed that the Ethereum protocol allowed their actions and that the wire fraud statute did not clearly prohibit their conduct. They also argued that the bots they manipulated were themselves engaging in predatory behavior.
However, US District Judge Jessica Clarke ruled that the wire fraud statute adequately covered the alleged scheme and that the government’s claims met the legal standard to proceed. While one count of conspiracy to receive stolen property was dropped, the core charges of wire fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering remain.
The case is still in its pre-trial motions phase, but a trial is expected to begin in October of 2025. If convicted, the brothers face serious prison time and hefty fines under federal statutes.
