Auction giant Sotheby’s has addressed recent accusations from Bored Ape investors, dismissing them as baseless and opportunistic.
These remarks arise following the inclusion of the auction house in a collective lawsuit targeting YugaLabs, the masterminds behind Bored Ape Yacht Club (BAYC).
The plaintiffs, who are BAYC art investors, claim there was a deliberate collaboration between Sotheby’s and Yuga Labs to misleadingly market and exaggerate the value of the digital art within the non-fungible token (NFT) series.
Back in September 2021, Sotheby’s showcased Bored Ape pieces, orchestrating an auction of 101 NFTs on behalf of the company which amassed $24 million. According to the accusers, this act lent an unwarranted legitimacy to the defendants, enabling them to potentially deceive in subsequent dealings.
The controversy erupted on December 10, 2022, more than a year post-auction, with the plaintiffs summoning over 40 defendants to court. This list includes Yuga Labs, Paris Hilton, Justin Bieber, Post Malone, among others. These celebrities were implicated based on their involvement in promotional activities, as outlined in the court documents.
Speaking to CNN, Sotheby’s firmly announced its intent to “vigorously defend” itself against what it considers groundless accusations.
Yuga Labs, initially on the defensive, echoed Sotheby’s sentiments, labeling the lawsuit as primarily “opportunistic” and lacking factual underpinning. It’s worth noting that this isn’t Yuga Labs’ first legal tangle; they previously initiated a lawsuit against developer Thomas Lehman for leveraging BAYC visuals and merchandise in a manner suggesting some form of collaboration.
A falling market amid chaos
Last year witnessed a substantial dip in digital asset values, impacting both the NFT and decentralized finance (DeFi) markets as they faced shrinking values.
DappRadar’s data sheds light on the decline: the NFT sales for the third quarter of 2022 amounted to $3.4 billion, down from $8.4 billion in the preceding quarter. This sharp decrease was largely attributed to the decline of the Terra network, even though the digital art sector had already begun experiencing drops during Q1 2022.
In 2021, soaring crypto prices, with Bitcoin (BTC) reaching peaks over $69,000, significantly buoyed the market. However, as Bitcoin’s value dropped in 2022 and with central banks hiking interest rates, investors retreated from volatile assets, resulting in plummeting NFT sales.
Offering insight on the situation, OpenSea’s CEO, Devin Finzer, stated, “This particular period stands out because it represents a confluence of a broader economic slowdown and the crypto winter. Previous crypto downturns were more confined to crypto valuations, so I believe it’s prudent to anticipate an extended duration for this downturn.”
The Bored Apes collection wasn’t immune to the market’s downturn either. Reports from the previous month indicate that its token’s value nosedived by over 93%, down from its all-time high of $26.72 in April 2022.