The lawsuit was filed in Texas, and it accuses LVMH of misappropriating patented systems for verifying and displaying NFTs on smartwatches. Meanwhile, the SEC is reportedly dropping its case against crypto YouTuber Ian Balina over alleged securities law violations related to the promotion of SPRK tokens. This move follows a broader regulatory shift under the Trump administration, which has scaled back crypto enforcement actions. Additionally, the SEC is considering scrapping a proposed rule that would have expanded its oversight of crypto firms. Luxury Giant LVMH Accused of Patent Infringement Watch Skins Corporation filed a lawsuit against LVMH, accusing the luxury fashion giant of patent infringement over its NFT display technology for smartwatches. The complaint was submitted on March 10 in a Texas federal court, and alleges that LVMH misappropriated its proprietary system that enables users to showcase verified NFT artworks on smartwatches. Watch Skins claims to hold multiple patents related to this technology and argues that LVMH’s TAG Heuer smartwatch and other products from the company’s brands unlawfully integrated its patented innovations. One of the watches Watch Skins claimed infringed on its patent LVMH is a multinational conglomerate that owns luxury brands like Louis Vuitton, Givenchy, TAG Heuer, Tiffany, Christian Dior, Hennessy, and Moët & Chandon, and it is accused of infringing on three patents held by Watch Skins. According to the lawsuit, the first patent covers a system that verifies NFT ownership before allowing it to be displayed on a smartwatch face, the second focuses on a verification mechanism through a blockchain wallet, and the third relates to the retrieval and display of customized watch faces based on NFT ownership. The lawsuit also asserts that TAG Heuer encouraged customers to engage in patent infringement by providing instructions on how to use its NFT display features. The complaint points out that TAG Heuer’s smartwatch enables NFTs to be displayed only if they are linked to the user’s crypto wallet, ensuring the authenticity of the digital assets shown. Watch Skins is seeking a jury trial, financial compensation for lost profits and royalties, and a court order to prohibit LVMH from continuing to use the patented technology. Watch Skins has been a pioneer in the NFT smartwatch space, and launched the world’s first blockchain-based NFT watch face marketplace at the Consumer Electronics Show in Las Vegas in 2020. The company’s mobile app allows users to purchase officially licensed smartwatch faces from popular brands, ensuring the authenticity of digital timepiece designs. SEC Drops Case Against Crypto YouTuber While LVMH’s legal troubles mount, Ian Balina , the CEO of Token Metrics and a popular crypto YouTuber, announced that the US Securities and Exchange Commission (SEC) is planning to drop its case against him over allegations of securities law violations related to the promotion of Sparkster (SPRK) tokens in 2018. During a recent interview , Balina said that the SEC informed him of its intention to recommend the court dismiss the lawsuit that was filed in 2022. The lawsuit accused him of engaging in an unregistered offering and promotion of SPRK tokens. Balina attributed this decision to the change in administration after the appointment of Mark Uyeda as acting SEC Chair by President Donald Trump after the departure of Gary Gensler in January. He suggested that the new administration is much more favorable toward the crypto industry. The SEC’s lawsuit against Balina alleged that he agreed to receive a 30% bonus on the $5 million worth of SPRK tokens he purchased during the initial coin offering but failed to disclose this to his audience. In May of 2024, a court ruled that SPRK tokens qualified as securities, falling under the SEC’s jurisdiction. At the time, Balina’s legal team announced plans to appeal, and a jury trial was initially scheduled for January of 2025 before being postponed. So far, no official filing has been made in the US District Court for the Western District of Texas requesting the case’s dismissal. Balina acknowledged the financial burden the lawsuit placed on him, and is very frustrated over the legal costs. If the SEC follows through with dropping the case, it will be one of several instances where the regulator recently pulled back on crypto-related enforcement actions. Since Trump took office in January, the SEC either ended or scaled down investigations into Robinhood Crypto, Gemini, Uniswap, OpenSea, Coinbase, Consensys, and Kraken. However, the commission is still engaged in a legal battle with Ripple. Although many people are happy with the regulatory shift, it also attracted a lot of criticism. Some suggest that the crypto industry leveraged political influence by supporting Trump’s presidential campaign and contributing to his inauguration fund. The White House even recently hosted a crypto summit , which was attended by executives from major crypto companies like Robinhood, Gemini, Coinbase, and Kraken, all of whom have previously supported pro-crypto policies. SEC Considers Scrapping Controversial Crypto Rule The way the SEC handles regulation may change even more as the regulator may abandon a proposed rule change that would have required certain crypto firms to register as exchanges. At the Washington Conference of the Institute of International Bankers on March 10, Mark Uyeda revealed that he instructed SEC staff to explore options for scrapping the portion of the proposal that sought to expand the regulation of alternative trading systems to include cryptocurrency firms. He pointed out that there is overwhelming public opposition to the rule change, and stated that it was a mistake to conflate Treasury market regulation with an effort to tighten oversight of the crypto industry. The rule was originally introduced in 2020 under former SEC Chair Jay Clayton, and was designed to provide clearer regulatory guidelines for alternative trading systems, particularly those involved in US Treasury markets. However, when Gary Gensler took over as SEC Chair, the scope of the rule was broadened in 2022 to redefine the concept of an exchange. The revised definition included communication protocols without a clear explanation of what that term encompassed, effectively bringing a wide range of crypto-related platforms under the SEC’s regulatory purview. During Gensler’s tenure, the SEC took a very aggressive approach to crypto regulation by initiating more than 100 enforcement actions against various firms between 2021 and his resignation on Jan. 20 this year. On the same day, Donald Trump began his second term as US President. Trump previously stated that he planned to remove Gensler if elected. Since his departure, the SEC softened its stance on cryptocurrency by dropping multiple cases against firms. In addition to abandoning certain enforcement actions, the SEC also launched a crypto task force that is aimed at developing a regulatory framework for digital assets. This initiative is being led by Commissioner Hester Peirce, who has long advocated for a more crypto-friendly regulatory environment.
