Back in the surreal days of 2021 a restless population, flush with pandemic stimulus and speculative fervor, discovered...non-fungible tokens or NFTs. They were unique cryptographic tokens that exist on a blockchain and cannot be replicated--whatever that meant. But who cares? Have money, will play, right? NTFs were irreverent and fun, as exemplified by the sale of a set of Bored Apes NFTs for more than $24 million in Sotheby's "Ape In!" online auction. The NFT craze generated over $40 billion in trading volume in 2021, peaking with artist Beeple's digital work--The First 5000 Days--selling for $69 million!
Good investments? Umm, you probably know where this is going. As per the Guardian, "a new report by dappGambl that reviewed data from NFT Scan and CoinMarketCap, 69,795 out of 73,257 NFT collections have a market cap of 0 Ether, leaving 95% of those holding NFT collections – or 23 million people – with worthless investments."
Not surprising then that people are having regrets and looking for someone to blame. In addition to a long list of celebrity NFT promoters like Paris Hilton, Gwyneth Paltrow, Kevin Hart, Snoop Dogg, Serena Williams, Madonna, Jimmy Fallon, Steph Curry, and Justin Bieber, Sotheby's is also apparently at fault. The famous auction house "has been named as a defendant in a lawsuit filed by investors who regret buying Bored Ape Yacht Club NFTs that sold for highly inflated prices during the NFT craze in 2021. A Sotheby's auction duped investors by giving the Bored Ape NFTs "an air of legitimacy"...the class-action lawsuit claims." Sure, no one was trusting Hilton or Curry to be NFT experts, but Sotheby's was supposed to do some vetting? We dunno know...Sotheby's does have an authenticity guarantee but that was not an issue here. If people want to bid something up, it's almost by definition not an auction house's job to interject. But there's a twist...one of the buyers in the auction, it now turns out, was FTX. Does that make a difference, even though no one knew at the time? Seems like a stretch.
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