The Federal Reserve Bank of Chicago has issued a cease and desist letter to Bitcoin Magazine, alleging it to have used a trademarked term IP — ‘FEDNOW’ — without its consent.
According to the letter, dated Oct. 27, 2023, the Federal Reserve confronted Bitcoin Magazine regarding its merchandise bearing the ‘FEDNOW’ mark, which they claim is likely to cause confusion and deception among consumers. The Fed believes people may misinterpret these items as being affiliated with or endorsed by the Federal Reserve.
The Federal Reserve, as per the trademark registration, owns all rights to the ‘FEDNOW’ service mark, which it uses to facilitate the electronic transfer of funds among financial institutions. Notably, the ‘FEDNOW’ mark was first used in commerce in Aug. 2019 and officially registered as a service mark in May 2023.
Bitcoin Magazine, in its defense, argues that its use of ‘FEDNOW’ is parodic and a form of political criticism directed at the Federal Reserve. In a reply letter dated Nov. 2, 2023, the magazine’s legal counsel, Zachary Shapiro, asserts that the design in question is a commentary on the “digital panopticon” symbolized by the Federal Reserve’s ‘FedNow’ platform, which enables 24/7 digital surveillance of transactions.
Shapiro wrote that given Bitcoin Magazine’s consistent critique of centralized financial entities, including the Federal Reserve, “any claim of consumer confusion concerning an endorsement or affiliation between its merchandise and the Federal Reserve seems rather far-fetched.” He also highlighted the perilous intersection of trademark law and free speech, suggesting that the Federal Reserve’s attempt to silence political critique raises concerns about First Amendment rights.
Mark Goodwin, the Editor in Chief of Bitcoin Magazine, has also issued an open letter to the Federal Reserve, asserting that the magazine refuses to comply with the cease-and-desist request and will not be silenced. Goodwin emphasizes that Bitcoin Magazine is merely exercising its First Amendment rights to social commentary and parody and is committed to defending its right to sell merchandise that critiques the FedNow system.
Clearly, this unfolding dispute presents another instance of the tension between traditional financial institutions and the emerging cryptocurrency industry. It remains to be seen how this legal face-off will conclude and what implications it might have for the broader discourse on financial systems, privacy, and the First Amendment.