Holders of the original non-fungible token (NFT) collection CryptoPunks V1 have filed a counter-DMCA notice to overturn a request by creator Larva Labs to delist the collection from OpenSea.

Larva Labs issued the DMCA notice — a takedown notice by copyright holders — earlier in the month, arguing it maintains the license for the V1  tokens and no longer wants them to be traded, as they undermine the value of the current V2 series. The V1 community is arguing that as close to US$50 million has been spent on the V1s, the community holds at least some ownership over the assets.

As the legal proceedings continue, the case will be closely watched for what it may reveal about the future of copyright laws and the potential need for oversight within the industry. 

“I’m really excited to see how it does play out,” said Yehuda Petscher, strategist at NFT data aggregator CryptoSlam, telling Forkast it’s one of the more significant stories we’ve seen on the NFT scene to date. “All eyes are on it: we’re talking about the biggest brand in NFTs with Larva Labs and CryptoPunks, so it’s going to be a wild one.”

The V1 series was the original minting of the CryptoPunks collection but were replaced by the current V2 models upon the discovery of a bug that allowed buyers to instantly withdraw the Ether used to purchase them, leaving sellers with no profits. Existing holders of the series were airdropped updated V2 versions which became the standard, authorized versions of the collection.

Petscher himself is a V1 holder, which he bought as he recognized the historic significance of the initially discarded collection.

CryptoPunks are the most traded NFT collection in the world, with over US$2 billion in sales volume across their 10,000 units. If the V1s are considered legitimate, that would double the supply of CryptoPunks and potentially deflate their unit price.

Larva Labs had actually sold 210 ETH or over US$600,000 worth of CryptoPunks V1 prior to issuing the takedown order, as the company thought selling the tokens would give the impression they were not of any value — a fact the firm now recognizes was a poor decision.

The V1s have already been delisted from OpenSea only weeks after launch once the V2s were issued, as they were perceived to be inauthentic. Once the V1s were wrapped and listed on competing marketplace LooksRare, however, OpenSea reversed course once they began growing in popularity.

But the impacts of the case go beyond simply the price, as some have suggested it could see an NFT standard introduced in the industry in order to protect copyright — and investors. 

“Until there is the NFT standard, it is very tough to police each and every single transaction and collection in the market,” Anndy Lian, founding member of NFT creative studio Influxo, told Forkast, explaining that blockchain is useful for determining ownership but does not guarantee copyright. “The industry is still very much driven by speculation and price and if this continues you will see a lot more of these cowboys running around in the crypto market and in the NFT space,” he added.

CryptoSlam’s Petscher disagrees, saying all the information required to verify an asset is already stored on the blockchain along with the token itself, it’s just a matter of educating people to read and interpret the data that is stored there.

“The beauty of the blockchain is you don’t need that kind of oversight,” he said. “You don’t need certain regulations because some of these things are now indisputable. That is the power of the blockchain.”

The V1 CryptoPunks are still available through LooksRare, the upstart marketplace that has transacted greater sales volumes than OpenSea since launching in early January, though they have a significantly lower floor price of 9.3 ETH (US$26,500) compared to 72.69 ETH for the V2s.