Pepe the Frog’s Creator Nuked a $4 Million NFT Collection Over Copyright

Artist Matt Furie, the creator of Pepe the Frog who previously used copyright to fight off neo-Nazis who turned the character into a mascot, has found himself in yet another weird spat.

His nemesis this time is an anonymously-run NFT project that Furie claims rips off Pepe, which the project denies.

On Monday, Furie succeeded in getting OpenSea to take down the project Sad Frogs District, which the NFT marketplace listed as “officially verified” since August 9. The project’s website is also currently offline, which a post in the project’s Discord channel said was a “temporary” measure. Furie’s lawyers confirmed that the takedown request only applied to OpenSea.

Sad Frogs District consists of 7,000 cartoon frog images with varying features. They’re NFTs, or non-fungible tokens, because the details of those images are registered on the Ethereum blockchain, including most importantly the details of ownership. Cryptocurrencies like Bitcoin are fungible, which means that one Bitcoin is equal to any other, but non-fungible tokens are each unique and thus collectible. Just like fungible cryptocurrencies, non-fungible tokens trade like hotcakes. And like most crypto projects, there’s a vibrant and extremely-online community surrounding them.

Sad Frogs District, which launched last week, has netted $4 million in trading volume, with a median price of $450 in ether per sad frog, according to data from NFT Stats. But all that trading activity cooled down as of Monday’s takedown.

The takedown comes as Furie himself is getting into NFT sales and making millions of dollars along the way. He auctioned off an early cartoon of Pepe in April for 420 ETH (around $1 million), and launched another NFT project called PEGZ, which has amassed a trading volume of 3,000 ETH ($9 million) selling takes on the signature green frog as well as other characters. 

According to emails shared with Motherboard by Furie’s lawyers, Furie initially reached out to the project leads before its August 9 launch over Discord to request that the project be discontinued, and asked to be invited to the Sad Frogs Discord. “Lambo Frog” responded that “We are a little afraid that you will enter our server and cause chaos and panic.”

“And he was, unfortunately, blocked in their Discord channel and wasn't able to sort of explain what was going on,” Louis Tompros, one of Furie’s lawyers, said. 

Sad Frogs moderators on Discord first said that they weren’t aware that Furie was ever in the channel in a chat with Motherboard, but later confirmed his username is in ban logs, noting that no reason was given for the ban. Sad Frogs developers did not respond to Motherboard’s request for comment.  

“I’m disappointed in Matt for his overreach and his lack of support for artistic freedom. He clearly wanted to shut down the project for monetary reasons,” said moderator Kronos. “And I’m also disappointed that Matt and the devs couldn’t find a way to work together and find a solution that would have allowed the project to move forward in such a way that respected the artistic integrity of both parties and frog meme culture in general.”

Furie then managed to get hold of the project developers over email and asked them to pivot away from Pepe and instead focus on inspired works or original frogs, according to an email viewed by Motherboard. “But that communication broke down, as I understand it, and they stopped responding. And then there were tweets that suggested that Sad Frogs NFTs were endorsed by Matt Furie, which is just not correct,” Tompros said.

The tweets in question, which Furie’s lawyers shared with Motherboard, came from users saying that they read in the Sad Frogs Discord that Furie “approved” of the project. Motherboard viewed chats in the project’s Discord that stated that while Furie had neither condemned nor endorsed the project at the time, he was seemingly aware of it. 

The moderators told Motherboard the project has never claimed it is endorsed by him, and noted that on August 12, four days before the takedown, the project’s OpenSea profile said, ​​​​”The Frogs are inspired by collective artworks of internet artists and cyberpunk aesthetics. The project is not associated with Matt Furie.”

Ultimately, Furie sent a Digital Millennium Copyright Act (DMCA) takedown request to OpenSea. OpenSea acted on it, and the project is no longer available on the largest NFT marketplace. Naturally, with large sums of money involved, the Sad Frogs camp is not happy. 

“The worst part of the DMCA was the mental toll it took on some members and some mods who helped the community come really far in the first week of being a project,” a moderator who goes by old_frog told Motherboard. One moderator, who had bought 121 sad frogs at a total price of $24,870 in ether, said the takedown had pushed them to “the edge of killing myself” as they feared losing all their investment, according to a chat log seen by Motherboard. The moderator also posted in the Discord saying they were losing sleep and announcing that they would sell their NFTs to try and recoup the investment.

“​​Dude, you don't know the impact this has on people's life's. The collection was verified?! I lost 4K $, and I bet a lot of other people lost a lot more. I'm officially out of the NFT game now. This is really horrible, don't know how I'm gonna deal with this,” tweeted an anonymous user who goes by, well, Crypto Gambling Addict.

“This is how you want to be remembered? An artist that people love his Pepe design but so arrogant to let people use it in anyway they want. Hope life getting better for you man. Just lost 21k here. Part of my life savings,” tweeted another apparent investor.

“If we receive a good-faith DMCA, we're legally required to take the content down, but if the person on the other end wants to dispute, they can send us a counter-notice,” OpenSea’s head of product Nate Chastain tweeted on Wednesday. Chastain, or OpenSea, didn’t immediately respond to Motherboard’s request for comment.

Sad Frogs District did send a counter-notice, but with a bizarre twist.

“They've filed a counter-notice, and this is the part that to me [that] is a little bit strange and takes us down into an unusual place,” Tompros said. “They signed it as Vladimir Vladimirovich, which is the first and middle names of Vladimir Putin, and didn't provide an actual mailing address.” US copyright law doesn’t recognize anonymity in legal requests like this, he explained. 

Sad Frogs District claims “the material that they posted is protected by fair use,” Tompros said. 

There’s a long history of Pepe the Frog in cryptocurrency communities. One of the earliest NFT projects from 2017 is a Pepe-based digital art collectible, Rare Pepe Dictionary. Despite the appropriated white-nationalist connotations of Pepe in politics, crypto communities have embraced the frog without explicit political connotations; one example of this the use of Pepe in an ad for crypto finance initiative Pickle Finance, designed by NFT artist pplpleasr who set up a fund to tackle racism in the US. In his email to the Sad Frog leads, Furie noted that another NFT project, “Non-Fungible Pepes,” had recently shut down upon request. 

“​​We all believe that Sad Frogs are sufficiently distinct from Pepes and as a result [Furie] deserves no compensation. Perhaps if he helped with the art or creative direction then yes, but clearly he did not,” Kronos, another mod, told Motherboard. “I think these memes are all derived from actual frogs and nobody owns the right to solely meme an entire natural species.”

Furie has long defended his ownership of the character of Pepe using copyright law.  When InfoWars was sued by Furie for its use of Pepe the Frog’s likeness, it planned to use the argument that Pepe had taken on a life of its own as a meme, and was distinct from the character in Furie’s comics. InfoWars ended up settling with Furie and paying $15,000. Before that, Furie succeeded in stopping the publication of an islamophobic book and donated profits from its sale to the Council on American-Islamic relations, and forced neo-Nazi website Daily Stormer to stop using the character’s likeness. 

According to Furie’s lawyer, the pseudonymous counterclaim makes it hard to address the issues raised by Sad Frogs’ counter-notice. “And I mean, I understand, of course, people make their use type claims. In a normal circumstance where someone does that, you would then reach out to them [...] and figure out whether this is something that could be resolved,” Tompros said.

“We can't do that because we're dealing here with somebody who claims to be Vladimir Vladimirovich.”

The project devs are currently working to revamp some of the 7,000 sad frogs that could be argued to look similar to Pepe in some respects, like the design of lips or eyes. “I feel like it's the most clearcut way to keep the project alive and get us relisted on OpenSea,” said old_frog.

The Sad Frogs moderators claim Furie’s own projects riff on established IPs. “Pegz blatantly ripped off some of Disney's IP, so it's a little hypocritical of Matt to target distantly related cousins of Pepe,” Kronos claimed, in reference to one of the PEGZ that allegedly looks like Jabba the Hutt, Disney’s Star Wars character.

“I think that is a little bit of a distraction from the actual issue. And just not right,” Tompros said. “But of course, I am quite sure that [...] If any of the website hosts gets [a DMCA notice], we'd expect them to look at it and take it seriously and comply with the rules.”

“I did not think I would ever be talking to a journalist about cartoon frog money,” Tompros, who has been involved in many of those battles, said. “This whole Pepe saga has been a strange, strange road.”

Matthew Gault contributed reporting to this article.