A few days ago the founder of the WallStreetBets (WSB) subreddit, Jaime Rogozinski, who became popular also thanks to crypto, denounced Reddit.
The complaint states that Reddit removed him as a moderator of its forum due to an alleged violation of company policy for attempting to monetize a community.
WallStreetBets on Reddit amid 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 even 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).
For this very reason, they had attracted a lot of criticism, even though the facts Rogozinski disputed dated back to the year before.
A new subreddit dedicated to cryptocurrencies, called WallStreetBetsCrypto, was also launched in September 2021 after banning crypto discussions on the Reddit of WSB.
Rogozinski’s removal as moderator
The complaint states that in March 2020 the WBS subreddit exceeded 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 with Reddit’s policy.
Rogozinski says he carefully expanded the content moderation team while maintaining the ability to enforce forum rules.
Despite this, at some point Reddit allegedly took control of the group, invoking its moderation rules as a pretext.
In fact, the complaint itself admits that the group was exploited 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.
Indeed, it further reports that in March 2020, Rogozinski officially applied for registration of the WALLSTREETBETS brand with the US Trademark Office (USPTO), and in April, without warning, Reddit suspended Rogozinski’s account for seven days on charges of “attempting to monetize a community.”
The rule violated was allegedly Section 7 of the User Agreement then in effect, which stated that one could not “perform moderation actions in return for any form of compensation,” and that one could not enter into any agreement with a third party on behalf of Reddit, or any moderated subreddit, without Reddit’s written approval.
Rogozinski is challenging this decision nearly three years later, arguing that he had not obtained the compensation through moderation actions, but through simple posts.
Moreover, he claims that this justification was really just a pretext, because people commonly use Reddit to promote the sale of just about anything.
In the complaint they write:
“On Reddit, just about everyone, including aspiring pornographers and scam artists, can find a place, everyone that is except Mr. Rogozinski.”
According to reports by Reuters, Rogozinski has reportedly demanded $1 million in damages for breach of contract and violations of his publicity rights, as well as asking that Reddit be banned from using the WallStreetBets brand unless it reinstates him as senior moderator of the subreddit.
In fact, Rogozinski himself claims that the famous WallStreetBets brand would have helped Reddit reach a $10 billion valuation by the end of 2021.
Reddit for now has decided to refuse to pay, and to reject all allegations to the sender.
A company spokesperson said this is a completely frivolous lawsuit with no basis in fact, as Rogozinski was reportedly removed as a moderator of r/WallStreetBets from Reddit and banned by community moderators for attempting to get rich. Indeed, according to Reddit even this lawsuit is merely another attempt to enrich himself.
Indeed, what is most surprising is the fact that the lawsuit was filed in February 2023, meaning not in 2020, but not even in 2021 or 2022, after the subreddit exploded and the company reached its $10 billion valuation.
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 to proceed further or not.