Reddit sued by creator of WallStreetBets- The Cryptonomist

A few days ago, the founder of the WallStreetBets (WSB) subreddit, Jaime Rogozinski, which became popular also thanks to crypto, condemned Reddit.

The complaint says Reddit removed him as a forum moderator for an alleged violation of the company’s policy on trying to monetize a community.

WallStreet Bets on Reddit among crypto and stocks

WSB’s community on Reddit was founded back in 2012, but it exploded in early 2021.

It now has more than 13.5 million members, and in 2020 Rogozinski was forcibly removed from Reddit, preventing him from registering the community’s name, among other things.

In the WBS subreddit, investors and especially speculators exchanged information and advice, so much so that they had even been able to influence the prices of some stocks, including those of GameStop (GME).

Precisely for this reason, they had attracted much criticism, even though the facts Rogozinski contested dated back to the previous year.

A new subreddit dedicated to cryptocurrencies, called WallStreetBetsCrypto, was also launched in September 2021 after banning crypto discussions on Reddit until WSB.

Rogozinski’s removal as moderator

The complaint says that in March 2020, the WBS subreddit surpassed one million subscribers, and Reddit subsequently removed him as moderator of the forum.

Rogozinski claims he spent “literally years of hard work” building the WALLSTREETBETS brand, carefully starting and cultivating the community to ensure the forum was in line with Reddit’s policies.

Rogozinski says he carefully expanded the content moderation team while retaining the ability to enforce forum rules.

Despite this, Reddit at one point took control of the group, citing the moderation rules as a pretext.

In fact, the complaint itself admits that the group was used to promote some business ventures, including the book “WallStreetBets: How Boomers Made the World’s Biggest Casino for Millenials” written by Rogozinski himself and offered for sale on Amazon.

However, the complaint suggests that the real motive may be something else.

In fact, it further reports that in March 2020, Rogozinski officially applied for registration of the WALLSTREETBETS mark with the United States Trademark Office (USPTO), and in April, without warning, Reddit suspended Rogozinski’s account for seven days on charges of “attempting to monetize a society.”

The rule that was broken was allegedly Section 7 of the User Agreement then in force, which stated that one could not “perform moderation actions for any form of compensation” and that one could not enter into any agreement with a third party on behalf of Reddit, or any preferably moderated subreddit, without Reddit’s written approval.

Rogozinski challenges this decision almost three years later, arguing that he had not received the compensation through moderation actions, but through simple posts.

Moreover, he claims that this justification was really just a pretext, because people often use Reddit to promote the sale of just about anything.

In the complaint they write:

“On Reddit, just about anyone, including aspiring pornographers and scammers, can find a place, anyone but Mr. Rogozinski.”

The requirement

According to reports from Reuters, Rogozinski is reportedly seeking $1 million in damages for breach of contract and violation of his publicity rights, as well as asking that Reddit be barred from using the WallStreetBets brand unless it reinstates him as a senior moderator of the subreddit.

In fact, Rogozinski himself claims that the famous WallStreetBets brand would have helped Reddit reach a value of $10 billion by the end of 2021.

Reddit has so far decided to refuse to pay, and to reject all claims made by the sender.

A spokesperson for the company said this is a completely frivolous lawsuit with no basis in fact, as Rogozinski was allegedly removed as a moderator of r/WallStreetBets from Reddit and banned by community moderators for trying to get rich. In fact, according to Reddit, even this lawsuit is just another attempt to enrich themselves.

What is actually most surprising is the fact that the lawsuit was filed in February 2023, that is, not in 2020, but not even in 2021 or 2022, after the subreddit exploded and the company reached a value of 10 billion dollars.

In fact, the Reddit spokesperson added that the community has become very popular, especially since 2021, that is, without its involvement.

It will now be up to the US District Court, Northern District of California, to decide whether or not to proceed.