OpenSea once again delists CryptoPunks v1 as legal battle heats up

Many users bought Punks' NFTs on the basis that there were only going to be 10,000 of them, not potentially 20,000.

Late Monday, popular nonfungible tokens, or NFTs, platform OpenSea once again delisted the CryptoPunks v1 collection, which spiraled into existence along with the iconic CryptoPunks v2 collection due to a smart contract bug. This was allegedly due to a Digital Millennium Copyright Act takedown notice issued by CryptoPunks v2 developers Larva Labs to OpenSea. As the company is also the creator of the CryptoPunks v1 collection, this move has struck some as strange.

LL has forced @opensea to remove V1 Punks collection because of a DMCA takedown.

We are responding via a counter-notice from our counsel in due course. We look forward to updating you further.

In the meantime, trade using https://t.co/KjPg88vDqE or @LooksRareNFT pic.twitter.com/1qmgdQrR7l

— V1 Punks (@v1punks) February 7, 2022

For many years, OpenSea banned the CryptoPunks v1 collection as users shunned their authenticity. However, the collection's recent listing on competing NFT platforms, such as LooksRare, led to an increase in recognition and led OpenSea to rescind its first ban. At the time of publication, the wrapped CryptoPunks v1 collection had surpassed 315.44 Ether (ETH) ($974,000) in total volume traded and continues to operate.

But the battle for the authenticity of the NFT collection appears to be heating up. In an announcement posted in the official CryptoPunks v1 Discord, developer Velinova.eth alleges that they've spoken with a "top-tier IP attorney from the U.S." who claims they are "lawfully able to carry on in the trade of these CryptoPunks." Meanwhile, the community is preparing a counter-notice to the OpenSea takedown. On top of that, its NFT holders have chosen to rename the collection to "CryptoPunks V1 313 WPV1," partly to reflect the NFTs' wrapped nature for patching up the aforementioned bug.

CryptoPunks V1 community announcement | Source: Discord 

The issue of CryptoPunks' authenticity may have significant financial consequences. With a total of 824,947.17 ETH traded ($2.55 billion), CryptoPunks v2 is the most popular NFT collection globally. However, a part of the collection's high demand stems from its scarcity as its supply is fixed at 10,000 Punks. If another 10,000 images from CrptoPunks v1 are legitimized, it could potentially dilute the brand, leading to a rapid decrease in the NFTs' price.