A group of investors filed a lawsuit against Sotheby’s Holdings Inc. in connection with the 2021 Bored Ape Yacht Club NFT auction, seeking approximately $5 million in damages. This collection includes 10,000 digital works of art featuring monkey faces wearing a variety of celebrity-endorsed hats and glasses. The lawsuit involves numerous individuals, including Justin Bieber, Paris Hilton, Madonna, Jimmy Fallon, The Weeknd, Snoop Dogg, Kevin Hart and DJ Khaled, accused of promoting NFTs in a non-transparent manner. Investors say Sotheby’s worked with manufacturer Yuga Labs to misleadingly inflate prices. An NFT is a non-fungible token, a special type of token that represents a document of ownership and a certificate of authenticity of a unique asset. Thus, non-fungible tokens are not fungible.
Cause
The value of NFTs has plummeted over time. The monkey digital works can now be purchased for around $52,445, a stark contrast to the more than $400,000 being asked until May 2022. Also implicated in the lawsuit is Max Moore of Sotheby’s, who praised the anonymous buyer of the work in 2021, while investors claim he was involved with a company linked to the defunct Ftx. Investors believe Moore has created a false perception of the market. Sotheby’s denied the allegations, saying they were unfounded. Celebrities involved and Yuga Labs made similar statements. The complaint also alleges that Yuga Labs conspired with talent manager Guy Oseary and shopping app Moonpay to push celebrities to promote NFTs without disclosing payment information. Moonpay will make payments in cryptocurrencies and digital assets to influencers.
