Sotheby’s is being sued by investors of the Bored Ape Yacht Club (BAYC). The auction house was included in a class-action lawsuit filed against the creator of BAYC, Yuga Labs, in a recent amendment. The plaintiffs claim that the company misled investors by using famous endorsements and corporate approvals.
Previously, several celebrities including Justin Bieber, Jimmy Fallon, and Madonna have been involved in legal disputes. These celebrities have faced legal troubles in the past due to cryptocurrencies and NFT projects.
Bored Ape Yacht Club and the Lawsuit
The allegations against Sotheby’s focus on an auction held in September 2021 for a collection of 101 BAYC NFTs. Yuga Labs earned $24,393,000 from the sale, significantly surpassing the pre-sale estimate of $12-18 million. The lawsuit claims that the auction house aided in “misleadingly promoting” Yuga Labs’ NFT collection by giving it a sense of legitimacy.
According to the complaint, Max Moore, the president of contemporary art auctions at Sotheby’s, mischaracterized the BAYC NFT’s depictions by claiming that the undisclosed buyer was a “traditional” collector. The plaintiffs dispute this portrayal, alleging that the actual buyer was the cryptocurrency exchange FTX.
BAYC Prices Decrease
Sotheby’s BAYC auction took place amidst a cooling NFT market. After reaching its peak in 2022, NFT transaction volume decreased by 38% between the first and second quarters of 2023. The base prices of leading collections, including BAYC, have also dropped since the peak.
In the context of the lawsuit against Yuga Labs, some individuals mentioned in the case have distanced themselves from the creator of BAYC. Lawyers representing Jimmy Fallon stated that he had no connection to the company except for purchasing a Bored Ape mentioned in two episodes of The Tonight Show. Meanwhile, the value of a Bored Ape owned by Justin Bieber has decreased by up to 95%. Bieber paid $1.3 million for the NFT in January 2022, but its value is now approaching $60,000.
