Sotheby’s
About two years ago, NFTs were about to take over the art world. But of course, with almost everything else that comes with grand promises, NTFs are turning out a little more complicated than many once thought. One of the latest developments in this never-ending story came over the weekend when crypto investors hit Sotheby’s with a lawsuit over its NFT sales.
One of the most enduring symbols of the NFT craze has to be the contents of the Bored Ape Yacht Club, colloquially known as the Bored Apes collection. These were a collection of NFTs of cartoon monkeys generated by an AI, personalized with various facial expressions, clothing, accessories, and background colors. The company that created them, Yuga Labs, was valued at around $4 billion last year, mainly due to $1 billion in sales aided by high-profile celebrity endorsements. Given their value and popularity, some even referred to the Bored Apes as “blue chip” NFTs.
Over the past year, the idea of NFTs has steadily lost momentum, with NFTs and their producers losing much of their value. This is considered part of a broader trend among anything connected to cryptocurrency and blockchain-based technologies. Some analysts point out that in April 2022, when the Bored Apes reached the height of their value and popularity, they sold for nearly $430,000 each at a minimum. A year later, those prices have dropped about 88%, where very few Bored Apes are trading above $50,000 to $55,000. Some specific NFTs suffered even greater depreciation, such as one Bored Ape Justin Bieber bought for $1.3 million, suffering a 95% decrease in value since then. The most valuable Bored Ape NFT ever sold is Bored Ape #8817, which sold for $5.7 million through Sotheby’s metaverse marketplace. Its current estimated value is just under $250K, or a 95.3% decrease in value. One of the main reasons why NFTs received great amounts of exposure and attention was because they received legitimacy from various individuals and institutions. From celebrity endorsements to Beeple appearing on the Tonight Show, many moments accumulated and helped solidify digital art and artists as a part of popular culture. However, auction houses granted them recognition in the eyes of serious art collectors. Most notably, Christie’s sold several works by Beeple, including Human One and his Everydays collection for $28.9 million and $69.3 million, respectively.
On September 9, 2021, Sotheby’s hosted a sale called Ape in!, consisting of two lots, one being a collection of 101 Bored Ape Yacht Club NFTs — the entire collection sold for $24.4 million w/p against an $18 million high pre-sale estimate. But now, some of Yuga Labs’ investors and customers are suing them and Sotheby’s for “deceptively promot[ing]” the Bored Apes sale and artificially inflating the NFTs’ value. Adam Titcher and Adonis Real originally filed the lawsuit in California last December against Yuga Labs and the celebrities paid to hawk their product for breaking unfair competition laws and artificially inflating the NFTs’ value. They also allege aiding and abetting, civil conspiracy, and unjust enrichment. Since then, the plaintiffs have expanded to a group of six, while Sotheby’s was added as a defendant on August 8th.
By hosting NFT sales, the plaintiffs allege that Sotheby’s gave their “stamp of approval” to the Bored Apes, playing a part in inflating the collection’s value. Furthermore, Sotheby’s Hong Kong’s head of contemporary art, Max Moore, described the collection’s buyer as a “traditional” collector. To the plaintiffs, this made it seem like the Bored Apes had been bought by someone who usually buys oil paintings and is now placing their faith in the digital arts. However, the plaintiffs claim this was false and that the now-defunct cryptocurrency exchange FTX had been the buyer. They argue that this misrepresentation allowed NFTs to be perceived as finally entering the mainstream when that was not the case. Some of the celebrities that publicly endorsed the Bored Apes Yacht Club have also been named as defendants in the suit, including Paris Hilton, Jimmy Fallon, Madonna, Serena Williams, Justin Bieber, and Beeple. Most of them had been originally connected to Yuga Labs through one of the other defendants, the Hollywood talent agent Guy Oseary.
Some say that Yuga Labs could owe investors as much as $2 billion by the end. Sotheby’s representatives have described the suit’s accusations as “baseless”. Yuga Labs called the legal action “completely without merit or factual basis.” Suing Yuga Labs plus the list of notables was hard enough. Adding one of the largest auction houses in the world as a defendant may prove an even more difficult task.
NFT Lawsuit Names Sotheby’s As Defendant
Sotheby’s
About two years ago, NFTs were about to take over the art world. But of course, with almost everything else that comes with grand promises, NTFs are turning out a little more complicated than many once thought. One of the latest developments in this never-ending story came over the weekend when crypto investors hit Sotheby’s with a lawsuit over its NFT sales.
One of the most enduring symbols of the NFT craze has to be the contents of the Bored Ape Yacht Club, colloquially known as the Bored Apes collection. These were a collection of NFTs of cartoon monkeys generated by an AI, personalized with various facial expressions, clothing, accessories, and background colors. The company that created them, Yuga Labs, was valued at around $4 billion last year, mainly due to $1 billion in sales aided by high-profile celebrity endorsements. Given their value and popularity, some even referred to the Bored Apes as “blue chip” NFTs.
Over the past year, the idea of NFTs has steadily lost momentum, with NFTs and their producers losing much of their value. This is considered part of a broader trend among anything connected to cryptocurrency and blockchain-based technologies. Some analysts point out that in April 2022, when the Bored Apes reached the height of their value and popularity, they sold for nearly $430,000 each at a minimum. A year later, those prices have dropped about 88%, where very few Bored Apes are trading above $50,000 to $55,000. Some specific NFTs suffered even greater depreciation, such as one Bored Ape Justin Bieber bought for $1.3 million, suffering a 95% decrease in value since then. The most valuable Bored Ape NFT ever sold is Bored Ape #8817, which sold for $5.7 million through Sotheby’s metaverse marketplace. Its current estimated value is just under $250K, or a 95.3% decrease in value. One of the main reasons why NFTs received great amounts of exposure and attention was because they received legitimacy from various individuals and institutions. From celebrity endorsements to Beeple appearing on the Tonight Show, many moments accumulated and helped solidify digital art and artists as a part of popular culture. However, auction houses granted them recognition in the eyes of serious art collectors. Most notably, Christie’s sold several works by Beeple, including Human One and his Everydays collection for $28.9 million and $69.3 million, respectively.
On September 9, 2021, Sotheby’s hosted a sale called Ape in!, consisting of two lots, one being a collection of 101 Bored Ape Yacht Club NFTs — the entire collection sold for $24.4 million w/p against an $18 million high pre-sale estimate. But now, some of Yuga Labs’ investors and customers are suing them and Sotheby’s for “deceptively promot[ing]” the Bored Apes sale and artificially inflating the NFTs’ value. Adam Titcher and Adonis Real originally filed the lawsuit in California last December against Yuga Labs and the celebrities paid to hawk their product for breaking unfair competition laws and artificially inflating the NFTs’ value. They also allege aiding and abetting, civil conspiracy, and unjust enrichment. Since then, the plaintiffs have expanded to a group of six, while Sotheby’s was added as a defendant on August 8th.
By hosting NFT sales, the plaintiffs allege that Sotheby’s gave their “stamp of approval” to the Bored Apes, playing a part in inflating the collection’s value. Furthermore, Sotheby’s Hong Kong’s head of contemporary art, Max Moore, described the collection’s buyer as a “traditional” collector. To the plaintiffs, this made it seem like the Bored Apes had been bought by someone who usually buys oil paintings and is now placing their faith in the digital arts. However, the plaintiffs claim this was false and that the now-defunct cryptocurrency exchange FTX had been the buyer. They argue that this misrepresentation allowed NFTs to be perceived as finally entering the mainstream when that was not the case. Some of the celebrities that publicly endorsed the Bored Apes Yacht Club have also been named as defendants in the suit, including Paris Hilton, Jimmy Fallon, Madonna, Serena Williams, Justin Bieber, and Beeple. Most of them had been originally connected to Yuga Labs through one of the other defendants, the Hollywood talent agent Guy Oseary.
Some say that Yuga Labs could owe investors as much as $2 billion by the end. Sotheby’s representatives have described the suit’s accusations as “baseless”. Yuga Labs called the legal action “completely without merit or factual basis.” Suing Yuga Labs plus the list of notables was hard enough. Adding one of the largest auction houses in the world as a defendant may prove an even more difficult task.