Why the NFT investor group is suing Sotheby’s (and Madonna, Justin Bieber and other VIPs)

The NFT frenzy passed as quickly as it began. And with the collapse in valuations, lawsuits are now coming in, like the one filed by some investors against Sotheby’s for the NFT Bored Ape Yacht Club auction. Labs would artificially inflate their prices. In addition to Sotheby’s, VIPs such as Justin Bieber and Serena Williams are involved in the lawsuit, who are accused of promoting the NFT collection without disclosing any financial interests. The plaintiffs are seeking damages of at least $5 million.

In September 2021, Sotheby’s sold over 100 NFTs to a single buyer in an online auction worth over $24 million. “Sotheby’s claims that the unknown buyer was a ‘traditional’ collector created the erroneous impression that the Bored Ape Yacht Club (NFT) market was ripe for a mass audience,” the lawsuit filed in California federal court earlier this month said. The lawsuit was filed in December last year, but Sotheby’s was not explicitly mentioned.

However, documents filed in court a few days ago explicitly mention the world’s most famous auction house, as well as several other companies, such as sportswear giant Adidas, as part of a “vast scheme” to artificially inflate prices. .

NFTs exploded in 2021: Twitter founder Jack Dorsey’s first tweet sold for $2.9 million within weeks, LeBron James’ dunk video garnered over 200,000, GIF Nyan cat for 600,000. All digital objects, therefore by definition reproducible, which have acquired their uniqueness precisely because of the non-fungible token, become art objects for collecting, as well as an opportunity for investment and speculation. Daily: first 5000 days Beeple, i.e. Mike Winkelman, achieved a record that has never been repeated: it was sold for $69 million, but by another auction house: Christie’s, Sotheby’s historical competitor. Bored Ape Yacht Club Digital Monkeys, which sold for over $400,000 until May 2022, can now be purchased for just over $50,000. But no one else buys them, so the real cost is even lower.

Among the many VIPs featured in the lawsuit against Sotheby’s are The Weeknd, Snoop Dogg, Kevin Hart, DJ Khaled. And Guy Osiri, whose venture capital firm invested in cryptocurrency payment platform Moonpay. According to the indictment, Oseary partnered with Yuga Labs to promote NFT by generating interest from potential customers and transferring payments to Moonpay. For example, on the November 11, 2022 episode of The Tonight Show, host Jimmy Fallon announced that he had acquired his Bored Ape Yacht Club NFT through the Oseary investment platform. Fallon referred to MoonPay as the “cryptocurrency PayPal” on one episode of her talk show, and spoke about NFT Bored Ape again on another episode of her show with host Paris Hilton. Other VIPs involved, such as Gwyneth Paltrow, have not disclosed that they have a stake in Moonpay despite the promotion of the company.

Osiri has been Madonna’s manager for years, so it’s no surprise that Luisa Veronica Ciccone is on the celebrity list. The American singer actually spoke out in favor of the NFT, thanks on twitter Moonpay for giving her a digital monkey. But then she decided to go it alone, creating three NFT video clips with Beeple to sell at auction. But for good reason: the proceeds went to as many non-profit organizations that support women and children as possible.