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Chris O’Brien is a member of Venable’s Entertainment and Media Group as well as co-founder and co-head of Venable’s Blockchain and Digital Currencies Group. He is a corporate attorney who works with major corporations, established companies, and nascent enterprises. Chris advises buyers, sellers, investors, and joint venture partners in a range of corporate transactions and financings. He frequently serves as outside general counsel for his clients, including content producers and distributors, talent agencies, operating companies across a range of industries, and varied financing sources.

The blockchain community has debated for years whether Decentralized Autonomous Organizations (DAOs) can or should be analogized to a corporate form and whether they operate to insulate DAO members from legal liabilities. Some states have passed statutes regarding how DAOs are classified, such as Wyoming’s “DAO LLCs” law and Utah’s DAO Act. In Sarcuni v. bZx DAO, a class action pending in the Southern District of California, the liability of DAO members is at the forefront, and the first round of the fight was not a good one for them. On March 27, the court denied a motion to dismiss filed by members of the DAO, finding that the bZx DAO and its successor Ooki DAO are plausibly alleged to be a general partnership in which the members of the DAO are the partners. This is a case of first impression where a DAO’s members (its token holders) could be jointly and severally liable for the actions of the DAO.

bZx DAO operates a blockchain-based software system called bZx Protocol. The bZx Protocol was hacked in 2021, and its users lost approximately $55 million in digital tokens. To compensate those impacted by the hack, the bZx DAO developed and approved a compensation plan, but recoupment would take many years. Plaintiffs, who are 19 bZx Protocol users who lost $1.7 million collectively in the hack, filed a lawsuit in June 2022 claiming that bZx DAO’s negligent security protocols led to the hack.Continue Reading DAO or Dare: The Implications of Sarcuni v. bZx DAO for DAO Member Liability

The start of 2023 hasn’t gone much better for the blockchain and cryptocurrency industry than the end of 2022 did. In declining to dismiss a case alleging that non-fungible tokens (NFTs) called Moments are considered securities, a federal judge held in Friel v. Dapper Labs that a lawsuit against the creator of the NBA Top Shot platform can proceed. By surviving the motion to dismiss, the Plaintiffs plausibly alleged that these NBA Top Shot NFTs, and only these NFTs, could be a security. While the first of its kind to hold that an NFT could be considered a security, this seemingly narrow ruling could have far-reaching implications for other NFT projects and marketplaces.

NBA Top Shot is an NFT platform, owned and operated by Dapper Labs, that allows consumers to buy, sell, and trade Moments (digital video clips of player highlights) on Dapper Lab’s Flow Blockchain. On February 22, 2023, the United States District Court for the Southern District of New York denied Dapper Labs’ motion to dismiss, holding that although “it [is] a close call and the Court’s decision is narrow,” Moments qualify as a security under the Howey test. In its decision to deny the motion to dismiss, the court focused on prongs two and three of the Howey test.Continue Reading Layup or Airball? Court Holds NBA Top Shot NFTs May Be a Security in Friel v. Dapper Labs

The SEC has rung the bell again on a celebrity touting a crypto token offering without adequate disclosure of a paid role. On October 3, 2022, the Securities and Exchange Commission released its order instituting cease and desist proceedings against Kim Kardashian and detailing Kardashian’s violation of Section 17(b) of the Securities Act (see Administrative Proceeding File No. 3-21197). Kardashian came under scrutiny from the SEC after she promoted EthereumMax Tokens (Emax Tokens) via her Instagram account in June of 2021, near the height of the cryptocurrency market, without making the proper disclosures. The SEC had previously fined boxer Floyd Mayweather and rapper DJ Khaled in 2018 for similar violations of the SEC’s “anti-touting” rules.Continue Reading Oops they did it again – SEC brings Crypto Anti Touting Action against another celebrity – this time Kim Kardashian

How do motion picture studios protect their valuable content from piracy during distribution and exhibition in theaters? A recently awarded Disney patent aims to tackle such issues using blockchain, the distributed ledger technology underpinning popular cryptocurrencies.

The patent, “Blockchain Configuration For Secure Content Delivery” outlines the workings of a blockchain-based content distribution system for delivering, monitoring, and controlling playback of audiovisual works delivered to movie theaters. Through such a system, Disney may achieve an advancement in tackling the ongoing problem of piracy leaks when movies are released in theaters.Continue Reading Disney Patents Blockchain-Based Anti-piracy Movie Distribution System

On March 11, 2021, a piece of digital art sold for $69,000,000.00 (yes, sixty-nine million United States dollars) at Christie’s Auction House (online, of course). That happened roughly five months after its original sale, meaning that the piece created by the artist known as Beeple sold for over 100,000% of its original price ($66,666.66), pushing Beeple to become one of “the top three most valuable living artists” according to Christie’s. Other than the price, what makes the Beeple sale noteworthy is the fact that the work was in the form of an NFT.

What Is an NFT?

NFT stands for “non-fungible token,” or a bit of digital code written onto a blockchain (also called distributed ledger technology). Through an NFT, a digital asset like a piece of art, a video clip, or the very first Tweet can be permanently registered on a blockchain forever. Ownership and provenance can be verified instantly. For the first time, digital scarcity can be achieved for digital items and, with it, the promise of higher prices for digital assets, outside of cryptocurrencies like Bitcoin. You might pay a small fortune for an authentic Ted Williams rookie year baseball card, but not for a reproduction made today that is physically identical in every respect. The same idea is fueling a boom in NFTs sold by artists, athletes, and others, because the digital item is registered and its quantity limited. As a result, the owner has “the one” (or one of 100 limited edition items, for example) and can prove it. In this context, ”digital” may now mean scarce, and therefore valuable.Continue Reading NFTs Promise Digital Scarcity Through the Blockchain for Artists, Athletes, and Celebrities – and an Abundance of New Legal Issues

The federal government’s latest spending bill, the Consolidated Appropriations Act (Act), included $284 billion of renewed funding for the Paycheck Protection Program (PPP) and a newly established $15 billion grant program for “Shuttered Venue Operators” (described below). Congress also modified the PPP in numerous ways that should benefit businesses who receive PPP funding.

Under the Act, the allowable uses for PPP funds that will be forgiven was broadened to include, among other expenses, costs associated with protecting workers in compliance with federal health and safety guidelines and property damages caused during public disturbances in 2020 that were not covered by insurance. Additionally, the Act created a simplified loan forgiveness process for PPP loans under $150,000. Lastly, Congress clarified its original intent to allow taxpayers to deduct expenses paid with tax-free, forgiven PPP funds.Continue Reading New COVID-19 Relief Bill Reboots Paycheck Protection Program and Provides Grants to Hardest Hit Businesses in Entertainment

UPDATE: Applications for loan forgiveness have been made available on the Department of the Treasury’s website as of May 15, 2020.

https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf


UPDATE: As of April 16, 2020, the initial $349 billion in funds available through the PPP has been depleted, and the SBA is no longer accepting new applications. Discussions are currently in progress to inject additional capital into the program.

Additionally, some of the ambiguity surrounding payroll costs has also been cleared up by subsequent Treasury guidance. First, certain fringes, including group healthcare coverage and retirement benefits, are included in payroll costs. Furthermore, distributive shares from LLCs or S corporations and guaranteed payments from LLCs are included as payroll costs at the partnership level. It has been clarified that partners are not eligible to file for PPP loans as self-employed individuals.


On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or the “Act”).  The Act is a $2.2 trillion swiss army knife of economic relief provisions meant to reduce the impact of the COVID-19 pandemic on various parts of the U.S. economy.  Among these provisions is the $349 billion Paycheck Protection Program (the “PPP”), an expansion of the Small Business Administration Economic Injury Disaster Loan program (the “SBA”).  The purpose of the PPP is to help small and middle market businesses pay their employees and otherwise keep the lights on during the economic slowdown.  As entertainment productions grind to a halt worldwide as a result of COVID-19, the PPP may be a welcome boon for entertainment businesses trying to stay afloat during this challenging time.

Before addressing the rules, it should be emphasized that taxpayers should file their PPP loan applications ASAP.  It is anticipated that the $349 billion allocation to the PPP will be quickly absorbed and accounted for by applications submitted by this Friday (April 3), which means that applications filed next week may be out of luck unless Congress elects to expand the size of the PPP fund.  With that as our background, we continue with a general description of the PPP.Continue Reading FILE NOW! Eligibility of Entertainment Businesses for PPP Loans Under the CARES Act