Yuga Labs requests court sanction on Ryder Ripps for destroying private keys in ‘bad faith’

In the latest of the Yuga Labs’ legal dispute against artist Ryder Ripps and his partner Jeremy Cahen, the NFT studio behind the popular Bored Ape Yacht Club (BAYC) NFT collection requested a U.S. court to sanction Ripps for allegedly destroying private keys for his wallets containing RR/BAYC NFTs deliberately to “thwart” the court injunction, according to a filing last week.

“Given Mr. Ripps’ bad-faith destruction of his private keys, misleading declaration, and continued misrepresentations to Yuga Labs and the Court, the Court should exercise its inherent power and hold Mr. Ripps in contempt,” Yuga Labs said in the filing .

In a response filed Monday, the defendants requested the court to reject Yuga Labs’ sanction request. The filing said that Ripps’ counsel had reached out to Yuga Labs’ counsel, contrary to the company’s filing last week. It also alleged that Ripps complied with the October injunction in full, except for the orders tied to wallets which he lost access to.

The two parties have been in a long-running dispute surrounding Ripps and Cahen’s creation, RR/BAYC NFTs, which the court saw as an infringement of Yuga Labs’ Bored Ape Yacht Club trademark in a decision last October. The Oct. 25 injunction ordered Ripps and Cahen to relinquish any NFTs infringing intellectual property.

A California district court made a final judgment on Feb. 3 in favor of Yuga Labs and required Ripps and Cahen to burn any remaining RR/BAYC NFTs or hand them over to Yuga for them to be destroyed within two weeks, the filing said.

According to the filing , it was only on Feb. 21 that Ripps disclosed that he had destroyed private keys for the wallets containing those NFTs in December last year. Ripps explained that the action was to prevent any further inadvertent engagement with the wallet that may be seen as a violation of the court injunction.

“Mr. Ripps’ actions only further harm Yuga Labs by frustrating the purpose of the Court’s injunction,” Yuga Labs said in the filing. “To be clear, simply deleting private keys only means that Mr. Ripps can no longer access the infringing NFTs in his wallets—he still owns the NFTs, and they are still associated with him.” 

Yuga Labs added that Ripps could recover access to his NFTs if he possesses physical or digital backups of his private keys. The NFT studio further questioned the validity of Ripps’ explanation, saying that he continued to use one or more wallets tied to RR/BAYC after the initial court injunction date of Oct. 25.