Sotheby’s is being sued by Bored Ape Yacht Club (BAYC) investors. The auction house is named in a recent amendment to a class action lawsuit brought against BAYC creator Yuga Labs. The plaintiffs allege that the company misled investors using celebrity and institutional endorsements.
Previously, a string of celebrities, including Justin Bieber, Jimmy Fallon, and Madonna, have been named in the civil action.
Sotheby’s Helped Lend Legitimacy to Bored Ape Yacht Club NFT Collection, Claims Lawsuit
The allegations against Sotheby’s center on an auction for a lot of 101 BAYC NFTs it held in September 2021. The sale raised $24,393,000 for Yuga Labs, well above the $12–18 million presale estimate.
The lawsuit claims the auction helped Yuga Labs “deceptively promote” the NFT collection by lending it an air of legitimacy.
According to the complaint, following the sale, Sotheby’s head of contemporary art auctions, Max Moore, misled BAYC NFT’s depictions by claiming that the undisclosed buyer was a ‘traditional’ collector. The plaintiffs object to this depiction, alleging that it was, in fact, the crypto exchange FTX that purchased the collection.
Celebrity Hype Cools as BAYC Prices Remain Low
The Sotheby’s BAYC auction occurred in the midst of a heated NFT market that has cooled significantly since.
After peaking in 2022, between the first and second quarters of 2023, NFT trading volume dropped 38%. And floor prices for some of the most prominent collections, including BAYC, have plummeted since their peak.
Against this backdrop, some of the defendants named in the lawsuit against Yuga Labs have sought to distance themselves from the BAYC creator.
Lawyers representing Jimmy Fallon have previously stated that he has no connection with the company besides having bought a Bored Ape, which he mentioned in two episodes of the Tonight Show.
Meanwhile, the value of a Bored Ape owned by Justin Bieber, has dropped by as much as 95%. Bieber paid $1.3 million for the NFT in January 2022, but it is now worth closer to $60,000.
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