“It’s almost like they joined a cult. The more I question, the more they think I’m hating. I just want to protect them.”
By the time I received this message on Dec. 30, I’d already spent a month investigating Bejutsu — a massively hyped NFT project claiming to hold the official license for intellectual property from Naruto, one of the most popular manga series ever published. Fueled by a lifelong passion for anime and manga and a gut feeling, I was convinced Bejutsu was a scam. But I couldn’t prove it beyond a shadow of a doubt.
The message came from a friend of one of the artists working for Bejutsu. Suspicious about the project’s legitimacy, he sent me a copy of Bejutsu’s purported licensing agreement. As soon as I saw the contract—an elusive piece of evidence that, by this point, I’d been hunting down for days—I knew I’d found Bejutsu’s smoking gun.
Nearly everyone I spoke to who was involved with the project asked me to wait before going public. That included artists, staff, and Clay Taylor, Bejutsu’s self-assured co-founder. They gave me the same cryptic response: Bejutsu’s proof will come on Jan. 7. Just wait until Jan. 7.
But in the hype-fueled NFT space, even unknown projects can sell out within minutes of an unannounced stealth launch. Naruto sits at the intersection of pop culture nostalgia and rabid anime fandom. Officially licensed Naruto NFTs possessed the potential to skyrocket. And Bejutsu was designed to turn its characters and imagery into NFTs that would sell for millions. At least, that was the plan. And Clay’s instincts were spot on — Bejutsu attracted 40,000 followers to its Twitter account before it even launched. And 10,000 users flooded its Discord server within a minute of opening. I wanted to stop the scam before it reached wider audiences.
As a teen who often felt like I didn’t fit in, I drew inspiration from Naruto chasing his dreams in the face of adversity, galvanized by his catch phrase: ‘Believe it!’
“It is with my deepest apologies and regret to inform you that Bejutsu will be halting all business operations,” Clay tweeted. “I would like to clearly state that Bejutsu has never had any intentions of operating this business without a proper license nor to rug pull the community.” Clay declined to comment further for this story, referring me back to his public statement on Twitter.
With this, Clay had finally come to the realization that he, too, had been duped. Bejutsu was dead, leaving behind a trail of crushed artists, angry fans, and ultimately, a lesson in keeping our wits about us as we navigate the borderlands of web3.
The Naruto series, written and illustrated by manga artist Masashi Kishimoto, was one of the most popular gateways into Japanese animation for kids growing up in the 2000s. The epic story revolves around a young ninja named Naruto who dreams of becoming the leader of his village despite being dismissed as an outcast by his peers.
As a teen who often felt like I didn’t fit in, I drew inspiration from Naruto chasing his dreams in the face of adversity, galvanized by his catch phrase: “Believe it!”
I wasn’t alone. Bejutsu’s co-founders, Clay Taylor and his sister Sydney Taylor, seemed to have taken the “Believe it!” ethos to heart, too. (In fact, Bejutsu is just the “Be-” from believe it tacked onto “jutsu,” the in-world term for mystical ninja arts used in Naruto.)
The Ontario, Canada-based siblings had nothing in their professional credentials to back their ambition of helming an officially licensed NFT project linked to one of the world’s biggest anime properties. Both are university students with no apparent history in anime licensing or NFTs. Clay, a sophomore entrepreneurship major at Northwood University in Michigan, had been tweeting about his internship goals as recently as June. His Twitter bio reads, “Passionate about Web3 and esports,” but during a Bejutsu-related Twitter Spaces session in December, he mentioned that he didn’t personally own any NFTs.
Sydney, a global development major at Queen’s University in Canada, works as a marketing director at a student fashion network and did a five-year stint as the marketing and business development coordinator and social media manager for her family’s AutoMall business. The same business address would later double as Bejutsu’s address on contracts sent to the artists. Sydney could not be reached to comment on this story.
But lack of relevant experience didn’t stop them from trying. At some point, the Taylors apparently believed they’d secured the rights they needed to launch their project. On Oct. 13, 2021, Clay tweeted from his personal account: “Officially acquired the exclusive rights to Naruto NFTs and @Naruto on all social platforms. I am looking to partner with a developer for NFT contracts and a custom website.” (The tweet has been deleted.)
Ten days later, Clay and Sydney launched the @Bejutsu Twitter account. Their Twitter bio touted “authentic Naruto & Boruto NFTs in collaboration with Masashi Kishimoto,” the author of Naruto and its sequel Boruto.
In Nov. 2021, Clay won $3,000 for his Bejutsu concept at his school’s annual business pitch competition. Northwood University’s blog post described Clay’s pitch as “a business venture on the cutting edge of technology…[that] will allow individuals to purchase a digital film cell (of sorts) from the wildly popular Naruto series.”
Rather than use official artwork from Naruto, Clay sub-contracted independent artists to create fan art based on the franchise. He reached out directly to these artists, most of whom had a history of anime-inspired fan art, offering them the opportunity to work on a licensed Naruto NFT. Like Clay, many of these artists were new to the NFT space.
The artists signed contracts agreeing to create five to 10 “high-quality and custom NFT digital collectibles” of various Naruto characters. The contract guaranteed the artists a small upfront payment, along with a 20% after-tax commission on the minting revenue from their artwork.
Some of the artists had doubts about whether Bejutsu actually had the official Naruto license. Chirag Sharma, a digital artist who had been contracted by Bejutsu, told me about the project’s legitimacy in late Dec. 2021: “Just so you know, all of us artists have our own concerns. It’s just that the way we operate is to trust people first.”
Clay assured the artists via private messages that Bejutsu had indeed acquired the exclusive rights to sell Naruto NFTs. He shared an abbreviated one-page version of his licensing contract and said he would post a video of Naruto creator Masashi Kishimoto himself confirming the project on Jan. 7, 2022.
The artists’ belief that they were creating officially licensed Naruto merchandise would soon prove misplaced.
On Nov. 26, 2021, painter Jyothee Murali announced that she was working on licensed Naruto NFTs. “Guess who’s going to be making Naruto NFTs soon. Got the license & everything ready. We going to the moon,” she tweeted.
Jyothee already had attracted a sizable following on Instagram and Twitter from her anime-inspired paintings. In 2019, the luxury brand Coach hired her to create promotional art based on a cross-brand collaboration with the Naruto IP and actor Michael B. Jordan. The Bejutsu-related posts from her accounts quickly gained traction.
After some of the artists had completed their first artworks for the project in mid-Dec., Bejutsu’s marketing push began in earnest. Clay encouraged the artists to promote Bejutsu from their personal social media accounts. “You should blow up Twitter with this and tag Bejutsu,” Clay wrote in a private message to Jyothee.
Within days, Bejutsu’s Twitter account gained more than 40,000 followers without a single tweet. Clay’s personal Twitter account, which he used to relay public information about the project, also landed 20,000 followers. Anime fans on Twitter were buzzing about the upcoming “officially licensed” Naruto NFTs.
But there were signs that something was very wrong with Bejutsu.
A Brief Dissertation on Naruto Licensing
As it happens, I am a total Naruto geek. I’ve been collecting licensed Naruto merchandise for more than 20 years. (My favorites are the Naruto S.H.Figuarts action figure line, of which I own the complete series.) And I’ve kept tabs on hundreds of Naruto products from around the world as they transition from initial announcements to teaser prototypes to collectibles on my shelf.
Anime licensing, which is often quite complex, is a subject I can prattle on about for hours (much to my fiancee’s dismay).
The Naruto IP is co-owned by author Masashi Kishimoto and the Japanese company Shueisha, which originally published Naruto in their Weekly Shonen Jump magazine from 1999 to 2014.
Within Japan, licensed Naruto merchandising deals go directly through Shueisha. But outside of Japan, the Naruto license is divided amongst different master license holders based on region. In North America, Naruto’s master license holder is Viz Media, a manga publisher and anime distribution company owned by Shueisha and based in San Francisco.
This means that anyone in North America who intends to sell licensed Naruto products must deal with Viz Media. It also means that selling licensed Naruto products worldwide requires coordination with different regional licensors and distributors. Typically, these kinds of licensing deals are limited to major Japanese industry players, such as Bandai Namco Entertainment, which handles Naruto-related video games and has its own branches in Japan, Europe, and North America.
It’s an eyebrow-raising premise that two college students, with no prior experience in crypto or anime licensing, could obtain the exclusive global rights to create Naruto NFTs.
It’s no surprise that Naruto licensing requirements are strict. All officially licensed Naruto products, including promotional preview images, need to include copyright and trademark text. Licensed anime statue companies like Figurama, for example, include this information even when the preview image is only a silhouette of the characters.
If I’ve learned one thing over the years as a collector, it’s that if something doesn’t include copyright information, it’s probably not legit.
Throughout late Dec. 2021, Clay, Sydney, and the artists revealed a stream of previews. These included the commissioned artworks, as well as Bejutsu logos incorporating official Naruto images.
But none of these preview images included copyright or trademark information. This immediately raised my hackles.
I reached out to Bejutsu’s Twitter account for clarification on Dec. 21. Clay, writing to me via Bejutsu’s account, replied that copyright and trademark text “isn’t required as we aren’t posting from [an] official business source and they are just teasers.”
This was incorrect. As stated previously, Viz Media requires all officially licensed Naruto products to include copyright and trademark text.
I asked Clay and some of the artists for licensing proof. Clay declined to share evidence, but explained that his deal was directly with Masashi Kishimoto’s company, with Shueisha—Naruto’s Japanese publisher—as a co-signer.
But this was even more suspicious. Bejutsu was based out of Canada, so they would need to go through Viz Media for licensing rights.
I informed Clay that he had very likely fallen for a scam. There was no conceivable reason that Masashi Kishimoto would be directly involved with the licensing process, so if Clay had been in contact with someone claiming to be Kishimoto, that person was almost certainly lying. Clay insisted this was not the case.
“If this is a scam it is either being done by myself or I am too gullible.”
“If this is a scam it is either being done by myself or I am too gullible. I kindly ask you to direct your questions to me and keep our artists out of it as they cannot help you,” he wrote.
On Dec. 22, I reached out to Viz Media and inquired about Bejutsu’s legitimacy.
A representative for Viz Media confirmed that official merchandise will always carry official logos (Naruto, Shueisha, Viz Media, etc.), plus trademark and copyright credits, even within the digital space. “Our legal team is now looking into this,” they said.
Within a few days, nearly every Bejutsu-related social media post was hit by DMCA (Digital Millennium Copyright Act) takedown claims, which are complaints made on digital content that is suspected to be in violation of copyright laws. According to screenshots of the takedown claims, they were filed by Eric Green of Remove Your Media LLC, a third-party anti-piracy company that commonly acts on behalf of Viz Media.
In spite of this, Bejutsu pushed forward with the launch of their Discord community on Dec. 27. Clay announced that the Discord server would initially only be open to 10,000 members. Fans were encouraged to follow the personal accounts of all Bejutsu staff and artists to have a chance at entering the Discord. Through this method, everyone involved with the project gained thousands of new followers over the coming days.
But the DMCA takedowns had shaken the faith of some artists involved in the project. Both Twitter and Instagram have banned users who rack up too many DMCA claims, and since many of the artists had promoted Bejutsu from their own accounts, their entire livelihoods could be in jeopardy.
With the help of a Bejutsu artist’s concerned friend, I obtained the Bejutsu licensing contract Clay had sent internally as proof. The one-page licensing contract, dated Nov. 22, read as follows:
“Dear Bejutsu: Masashi Kishimoto NARUTO hereby grants you permission to copy, sell and distribute copies of Naruto, Naruto Shippuden & Boruto: Naruto Next Generations published by Shueisha & Authored by Masashi Kishimoto and to incorporate the copyright work, in whole or in part, into derivative works for sale and distribution in the form of non-fungible tokens [NFT] for sales in NFT Market, @Naruto with Verification, Social Media Rights license and Naruto Apparel (All Products).”
For a major IP like Naruto, it was incredibly odd for a single paragraph to grant the rights to everything from NFTs and apparel to verified ownership of social media accounts. (Plus, the Twitter handle @Naruto has been owned by a private individual since April 2007.)
The random underlined text throughout the contract also seemed strange, so I Googled “copyright license agreement template.” The fifth image result was a one-page copyright license template on studylib.net using the exact same language as the Bejutsu contract, with fill-in-the-blank spaces corresponding to the underlined text.
“Never in the history of licensing contracts have I ever seen a single page letter as a contract,” said OKHotshot, a blockchain analyst and security expert who helped me with research for this article and released his own Twitter thread deep-diving into the contract’s many inaccuracies. One of his discoveries: Kishimoto’s signature on the contract is an exact match of the Kishimoto signature on Narutopedia.com, a fan-run online database for the Naruto franchise.
The big question still remaining is, who was behind the bogus contract? The contract footer included the email address firstname.lastname@example.org. Another Google search revealed a Reddit thread from Feb. 2021 calling “masashikishimotojp.com” a scam that sells fake Naruto licenses. The domain was linked to a now-removed Instagram account, @official.kishi, with a bio stating: “For Kishimoto Arts, Copyrights & License of Naruto/ NS & Boruto Contact here.”
The identity behind the domain is still in question. The physical address on the contract directs to a shopping center in the United Kingdom. In late Dec., Whois.com showed the web domain’s registrant contact email as email@example.com with a physical address linking to a restaurant in New York City.
The registrant information has since been made private, but one thing is certain. It was never the real Masashi Kishimoto.
On the morning of Dec. 30, I privately sent all of my findings to Clay.
Later that morning, MsArtsy, one of the artists who had been contracted by Bejutsu, announced she was stepping away from the project. “Due to my lack of experience in this sphere I’ve partaken on a project which I thought was promising but actually doesn’t seem to be,” she wrote. “I should’ve done more research on this but I was just excited to be let on a big project. Huge apologies for this, I’ll take this loss as part of my learning experience to be more careful.”
Shortly thereafter, Clay posted that he was hitting the pause button as he ironed out the DMCA claim situation. “Our license originates from Masashi Kishimoto and Shueisha, VIZ Media’s parent company,” he said. “At this point we believe there is a confusion and/or miscommunication between the multiple entities who own Naruto’s IP… Until we are 110% confident this situation is resolved we will be pausing the business. We are working on getting permission to publicize our license prior to the 7th.”
That evening, I released my own Twitter thread documenting my research on Bejutsu’s illegitimacy, alongside OKHotshot’s analysis of the contract.
Fallout for Bejutsu was quick and brutal, as more artists and Discord mods publicly withdrew from the project, and fans lashed out. Some people even created memes joking about the paltry nature of the forged contract.
On Jan. 5 — the day Clay had expected to receive video proof from Masashi Kishimoto — he released a statement confirming that Bejutsu’s Naruto license was illegitimate. He said that Bejutsu had been unaware of any issues until hearing from Remove Your Media LLC. He clarified that the one-page contract was not the full licensing contract, but rather a basic document he had requested from the licensor to share as proof to the artists.
In the statement, Clay also explained that he believed he had done his due diligence before paying for the license by tracking the license holder’s IP address during contract negotiations and confirming that their Ethereum wallet was with a reputable Asian exchange. He had planned to obtain video proof, but had not received any prior to launching Bejutsu’s promotional campaign.
“My biggest regret was not flying to Japan to confirm the identities of whom I was working with, and while I wanted to do this, it was not practical during the pandemic and it will haunt me forever.”
“I had been working tirelessly for months and invested my savings to make this a successful company and am deeply upset and angry with the outcome. In reflection, my biggest regret was not flying to Japan to confirm the identities of whom I was working with, and while I wanted to do this, it was not practical during the pandemic and it will haunt me forever,” wrote Clay.
To-date, Clay has not publicly released the Ethereum wallet address associated with the fake Masashi Kishimoto scammer.
The Fall of Bejutsu
If Bejutsu had launched with the model discussed in their group chat—a Dutch auction format mint starting at 3 ETH—their initial batch of 220 NFTs would have likely sold out immediately. This would have netted Bejutsu 660 ETH, or over $2M USD at current prices. There are no chargebacks or disputes in decentralized finance, so Bejutsu buyers would have had almost no means of recovering their money.
And even though the project ultimately failed to launch, there was considerable fallout. Jyothee’s Instagram account, which had amassed over 160k followers over the past six years, was taken down due to the Bejutsu-related DMCA claims. As for Clay, he lost whatever money he spent to buy the fraudulent license, and he said he and his family have received anonymous threats.
The fall of Bejutsu speaks to the high rewards and perilous lows of this space. The innovation and potential that make NFTs so exciting can be a double-edged sword this early in the game. As more brands and big IPs stake their claim into NFTs, remember to stay alert and research everything. The Bejutsu episode wasn’t the first case of unsavory activity in the NFT space, and it won’t be the last. Because where there’s a lot of money to be made, there’s a lot of money to be lost.
Dan Kahan, a former reporter at The Defiant, writes on crypto culture.
Read the original post on The Defiant.