A group of investors filed a lawsuit against Sotheby’s Holdings Inc. in connection with the 2021 Bored Ape Yacht Club NFT auction, seeking damages of approximately $5 million. This collection includes 10,000 digital artworks of monkey faces wearing a variety of celebrity-sponsored hats and glasses. Numerous individuals are involved in the lawsuit, including Justin Bieber, Paris Hilton, Madonna, Jimmy Fallon, The Weeknd, Snoop Dogg, Kevin Hart and DJ Khaled, all accused of non-transparent NFT promotion. Investors say Sotheby’s is partnering with maker Yuga Labs to mislead price gouging. NFT is a non-fungible token, that is, a special type of token that is a document of ownership and a certificate of authenticity of a unique asset. Thus, non-fungible tokens are not fungible with each other.
Cause
The value of NFTs has plummeted over time. Monkey digital artworks can now be purchased for approximately $52,445, a stark contrast to the over $400,000 requested through May 2022. Max Moore is also involved in a lawsuit that praised an anonymous buyer of the works in 2021. investors say it was due to a company associated with the defunct Ftx. Investors believe that Moore created a false impression of the market. Sotheby’s denied the allegations, saying they were baseless. Participating celebrities and Yuga Labs issued similar statements. The complaint also alleges that Yuga Labs colluded with talent manager Guy Oseary and trading app Moonpay to force celebrities to promote NFTs without disclosing pay. Moonpay will process payments in cryptocurrencies and digital assets to influencers.
