Key Takeaways
- The lawsuit stems from Shkreli allegedly live-streaming a rare Wu-Tang Clan album acquired by PleasrDAO in 2021 during a June 9th X Spaces event.
- Shkreli rubbished the lawsuit, claiming that members of PleasrDAO don’t support the filing of the litigation and weren’t given the opportunity to vote on the lawsuit.
PleasrDAO, a decentralized autonomous organization has filed a lawsuit against Martin Shkreli, infamously dubbed the “pharma bro.” The legal action stems from Shkreli’s alleged unauthorized live-streaming of the rare Wu-Tang Clan album, “Once Upon a Time in Shaolin,” which PleasrDAO acquired in 2021.
Shkreli initially bought the album for around $2 million in 2015. However, he forfeited it as part of a $7.4 million asset forfeiture following his 2017 conviction for securities fraud. PleasrDAO later purchased the album for $4 million in 2021 and paid an additional $750,000 in 2024 to secure exclusive rights to the music, data, files, and packaging.
The lawsuit, filed on June 10, 2024, in the United States District Court for the Eastern District of New York, accuses Shkreli of statutory misappropriation of trade secrets. PleasrDAO claims Shkreli’s actions have caused them significant monetary and irreparable harm.
According to the complaint, Shkreli has shared digital copies of the album since his release from prison in May 2022, including hosting a live stream on X Spaces on June 9, 2024, where thousands tuned in to listen.
PleasrDAO’s complaint states, “It now appears, however, that Shkreli improperly retained copies of the data and files at the time of the forfeiture and has released and/or intends to release them to the public.” The DAO argues that the album was meant to be a unique item, and Shkreli’s actions have violated the uniqueness and value of their investment.
PleasrDAO planned to selectively share the album’s contents, but Shkreli’s continued distribution of the unreleased tracks has, according to the lawsuit, “diminished” the album’s value and inflicted “significant monetary and irreparable harm.”
The court has granted PleasrDAO’s request for a temporary restraining order (TRO), barring Shkreli from using, disseminating, streaming, or selling any interests in the album, including its data and files. Shkreli is also ordered to provide an inventory of the copies he retained, records of profits made from its distribution, and to show cause why the court should not seize all his remaining copies.
Shkreli has denounced the lawsuit, arguing that PleasrDAO did not discuss the intent to pursue legal action with its members. He claims the DAO never held a vote on the matter, suggesting a disconnect between the leadership and its broader membership.
Crypto lawyer Gabriel Shapiro supported Shkreli, stating, “I’m rooting Shkreli on this one. The case seems pretty weak as well.” In contrast, Uniswap founder Hayden Adams supported PleasrDAO, stating, “People complaining about DAOs suing don’t realize Pleasr is basically a member-owned museum.” He emphasized that PleasrDAO’s actions were justified given their motive to protect intellectual property rights.
