Peanut the Squirrel Lawsuit is a Warning for Memecoin Creators

The owner of Peanut the Squirrel, a social media phenom who was euthanized by New York State, climbed deeper into the memecoin wars yesterday, slapping Binance with a cease and desist notice after the world’s largest exchange listed PNUT.

The PNUT memecoin skyrocketed after New York officials seized and then killed the furry social media star and his companion, Fred the raccoon. It spiked north of $2.25, retreating to $1.04 with a market cap of $1.05 billion according to CoinGecko.

In targeting Binance, Peanut’s owner Mark Longo is following up on a threat he made in November after launching his own memecoin, Justice for Pnut and Fred (JUSTICE). Its market capitalization spiked to nearly $150 million before immediately tanking. Its current market cap is $313,131.

The C&D letter from Longo’s attorney demanded that Binance stop the “unlawful copying of the PNUT Image in the advertisement, distribution, and sale of cryptocurrency” as it “infringes upon our client's exclusive copyrights.”

Specifically, Longo’s lawyers called out Binance for using the trademarked picture of Peanut in a cowboy hat, as well as “Peanut the Squirrel” and “PNUT.” Intellectual property owners have broad control over how their trademarked and copyrighted works can be used, including in advertising, distributing and selling those works. The Copyright Act provides penalties of up to $150,000 per work infringed.

Copyright Applies to Memes

How much effect the letter will have is debatable. Well-known crypto attorney Stephen Palley said he doubts the letter alone will have much impact in the short term, noting that it’s just a letter, not a lawsuit or court ruling.

Binance did not respond to a request for comment.

But the issue does throw a spotlight on the common use of potentially copyrighted images by memecoins.

“I don’t know how the litigation will go but general principles of intellectual property law apply to memecoins as much as any other asset,” Palley said. “If nothing else, it is a reminder that IP issues don’t necessarily go away just because it’s crypto.”

He suggested that a memecoin using the trademark of Coke or Pepsi would not get listed on a centralized exchange like Binance or OKX and Bybit, which also list PNUT.

“I doubt that this letter will have any impact on decentralized exchanges,” like Raydium that list PNUT, Palley added.

In an X post in which he revealed the lawsuit, Longo promised that more letters were forthcoming. “The crypto world has taken my tragedy and has profited every which way possible,” Longo said in a video on X, adding that JUSTICE is the only coin with which he is affiliated.

PNUT supporters have noted that Longo was gifted about $50,000 worth of PNUT, which they say he sold in order to fund JUSTICE.