In the anything-goes world of cryptocurrency and decentralized finance (DeFi), a fierce legal battle is brewing between a meme coin project and the owner of the viral cat whose image is being exploited to promote it.

The coin in question is Shark Cat (SC), a recent phenomenon on the Solana blockchain that managed to rapidly accumulate a staggering $390 million market cap by leveraging the ubiquitous “shark cat” meme featuring a kitten named Nala dressed in a tiny shark costume.

However, Nala’s owner, who goes by the name Pookie, was completely unaware that her beloved pet’s likeness had been co-opted to create an immensely valuable meme coin, or at least that was the case until other crypto projects started approaching her about using Nala’s image themselves.

Now, Pookie is fighting back against the Shark Cat project, demanding both monetary compensation and control over how Nala’s image and brand are being used. However, the Shark Cat team has refused to cave, setting the stage for a high-stakes legal showdown.

Shark Cat Meme Coin Dispute Key Takeaways:

  • Legal Battle: The owner of the viral “shark cat” meme, Pookie, is suing the creators of the Shark Cat (SC) meme coin on Solana for using her pet’s likeness without permission. Pookie demands compensation and control over the image’s usage.
  • Failed Negotiations: Pookie sought 10% of the token supply but was offered far less, leading to a breakdown in talks. The Shark Cat community has since criticized Pookie’s actions.
  • Potential Legal Precedent: The outcome of this lawsuit could set a precedent for copyright and intellectual property rights in the crypto space, especially for meme coins using viral images.
  • Latest Update: As the case progresses, Shark Cat’s token has seen a dramatic drop in value, highlighting the risks of relying on unlicensed viral media for crypto projects.

The Origins of Shark Cat

While meme coins inspired by viral pets and pop culture are nothing new in crypto, Shark Cat took the concept to a whole new level. The token exploded in popularity in late March by posting memes, funny images, and videos of the cute shark-costumed mascot.

As is often the case with successful meme coins, the project’s origins and founders remain shrouded in mystery.

However, the Shark Cat that exists today was allegedly built by a team of 5 individuals who stepped in after the anonymous creators abandoned the project early on.

According to their own account, this team was simply aiming to perpetuate the thriving Shark Cat community that had taken social media by storm. However, Pookie has accused them of intentionally misleading holders about the project’s direction and her involvement.

Pookie Asks for 10% of Shark Cat and the Developing Team Refuses

For Pookie, learning that her beloved Nala had become an accidental crypto celebrity was a rude awakening. As the owner of both Nala’s wildly popular Instagram account boasting 4.5 million followers and an associated cat product business, Pookie had spent years carefully cultivating Nala’s brand and image.

So, when an anonymous user reached out offering $15,000 to use Nala’s photos for an unrelated meme coin, Pookie started digging into this bizarre new realm of crypto assets inspired by her cat. What she found out was that the massively successful Shark Cat project was already amassing a buckload of money by leveraging Nala’s likeness without permission.

Pookie quickly reached out to the Shark Cat team demanding both monetary compensation for the use of the Nala images and complete control over how they were used in association with the token. Her brazen proposal consisted of asking for a 10% share of the entire token supply worth around $20 million at the time – a demand that the Shark Cat team swiftly rebuffed.

This kind of situation is extremely unusual in the meme coin space but not because copyright infringement is rare.

In fact, many if meme coins are built on some kind of copyrighted material that the founders don’t own. It’s just extremely rare that the copyright holders actually notice and try to get a piece of the action.

A Hostile Negotiation Descends into Ugly Allegations

What followed was an increasingly hostile back-and-forth as Pookie and the Shark Cat crew tried to negotiate a deal. According to Pookie, the team offered a mere $3,000 worth of tokens, a figure she found insultingly low. She then demanded a sit-down meeting involving all parties.

It was on this fateful Zoom call that the relationship between the two parties completely broke. While Pookie expected to negotiate her requested 10% stake and project control, she says that the call turned ugly after a “prominent hedge fund figure” joined on her side, angering the Shark Cat squad.

Also read: Meme Coin Mania on Base Explodes as BRETT & DEGEN Rip – Is It the Next Solana?

The two camps provided their take on the matter but ultimately agreed that the talks had reached an impasse. Shark Cat then issued Pookie an ultimatum – accept a revised offer of 2.5 million tokens worth over $600,000 at the time within 90 minutes or the deal is dead.

In the midst of this dispute, Pookie had also entered negotiations with another meme coin project called White Coffee Cat that wanted to use images of her other cat Coffee, who has cancer.

The negotiations in this proceeded more candidly as the team offered to use the token for charitable purposes to help Coffee. Pookie agreed and accepted a 1% stake in the project in exchange for letting them use the image of the kitten.

Upon learning of this deal, the Shark Cat team publicly torched Pookie, publishing a letter terminating negotiations while one member branded her and her associates as “GREEDY OPPORTUNIST PIGS” on Twitter. Moreover, the defiant Shark Cat community members started taunting Pookie about supposedly futile legal threats.

Despite the bravado from unnamed Shark Cat holders, multiple legal experts say that Pookie may have a strong case for a copyright infringement lawsuit over the unauthorized use of the photo depicting Nala with a shark hat that catalyzed Shark Cat’s rise.

“There’s a pretty reasonable argument to be made that basically all [Shark Cat] revenue is coming from the copyright infringement”, University of Kentucky law professor Brian Frye, who specializes in IP and crypto issues, told the crypto-specialized magazine Decrypt. “The only reason it seems this meme coin is popular is because it’s piggybacking on [Nala’s] brand identity.”

Frye explained that while proving copyright infringement is relatively straightforward when evidence exists, demonstrating actual damages is traditionally the hard part. However, Shark Cat’s business model being so singularly reliant on profiting from Nala’s image could make calculating damages much more clear-cut.

Further boosting Pookie’s potential legal case, the Zoom call snafu may have surrendered a crucial advantage that plaintiffs rarely have in crypto lawsuits – identifying the defendants. According to Pookie’s recollection of the virtual encounter, Shark Cat team members had their full legal names displayed during the meeting, allowing her team to determine that at least one key figure lives and works in the US, removing jurisdictional barriers.

“There’s a lot of money, there’s an available defendant, the infringement is really easy to prove”, Frye assessed.

Nala’s Team Preps for Court While the Coin Craters

shark cat meme coin all-time price chart

With Shark Cat buckling under the weight of the escalating public relations crisis, Nala’s team has proceeded on a legal offensive. A press release proclaimed an incoming copyright lawsuit while cease-and-desist notices were issued to the known Shark Cat principals.

Also read: PUPS, The Hottest Meme Coin on Bitcoin, Skyrockets 700% – Are MEME and MAXI Next?

Meanwhile, the Shark Cat token has shed nearly 96% of its value compared to its 3 April peak. As a result, the market cap has plunged from $390 million at some point to just $95 million as of today.

Pookie, however, has maintained that her intention is not to go after individual token holders but rather the force accountability from those developing and representing the project while negotiating in bad faith on behalf of the community.

For Frye, the entire issue could have been avoided if Shark Cat’s anonymous creators had taken rudimentary precautions when bootstrapping their operation – such as simply altering Nala’s image slightly to create a legally distinct derivative work.

“There’s an awful lot they could have done to avoid the most excessive amounts of potential liability”, Frye emphasized. “That clearly did not happen here.”

Moving forward, Pookie’s David vs. Goliath battle could set an important precedent over intellectual property rights in the Wild West that the crypto realm is. While meme creators have historically traded in a love zone, monetizing viral images and artworks without regard for copyright, this case highlights how this unlawful approach can quickly spiral into a legal and public relations catastrophe when serious money gets involved.

For the Shark Cat team and its remaining token holders, this crypto cat fight is guaranteed to be anything but friendly. Pookie seems committed to ensuring that she receives her fair share of the project’s immense financial rewards.