As a young rapper, Jay‑Z once teamed up with Damon Dash to sell CDs of his music out of a car in the Brooklyn projects. Today, the co-founders of Roc-A-Fella Records are embroiled in a legal fight involving one of the most cutting-edge investments: non-fungible tokens.
The lawsuit is among a flurry involving NFTs as U.S. courts begin to grapple with the novel legal issues surrounding ownership and regulation of the assets, which have recently exploded in value. More than half a dozen suits citing NFTs have been filed in federal courts alone since the start of 2020, as monthly trading volume in the world’s biggest NFT marketplace, OpenSea, soared from $8 million six months ago to more than $1 billion in August.
The dispute began in June, when Roc-A-Fella sued Dash, seeking to stop him from auctioning off the copyright to Jay‑Z’s debut album, Reasonable Doubt, as an NFT, which represents ownership of a digital object on a blockchain. Roc-A-Fella says that while Dash holds a one-third stake in the company, it owns the album itself, and he has no legal right to sell the NFT.