Sotheby’s is being sued by investors of the Bored Ape Yacht Club (BAYC). The auction house is named in a recent amendment to a class action lawsuit against BAYC maker Yuga Labs. The plaintiffs allege that the company misled investors using celebrities and institutional endorsements.
Previously, a string of celebrities, including Justin Bieber, Jimmy Fallon and Madonna, were named in the civil suit.
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 its pre-sale estimate of $12-18 million.
The lawsuit alleges that the auction helped Yuga Labs “deceptively promote” the NFT collection by giving it an air of legitimacy.
Following the complaint, Sotheby’s head of contemporary art auctions, Max Moore, misled BAYC NFT’s images after the sale by claiming that the unnamed buyer was a “traditional” collector. The plaintiffs object to this image, claiming that it was in fact crypto exchange FTX that purchased the collection.
Celebrity Hype Cools as BAYC Prices Remain Low
The Sotheby’s BAYC auction took place in the middle of a heated NFT market that has since cooled down significantly.
After peaking in 2022, between the first and second quarters of 2023, NFT trading volume fell by 38%. And rock-bottom prices for some of the most prominent collections, including BAYC, have plummeted since their peak.
BAYC Bottom Price (Source: CoinMarketCap)
Against this backdrop, some of the defendants named in the Yuga Labs lawsuit have attempted to distance themselves from the creator of BAYC.
Lawyers representing Jimmy Fallon have previously stated that he has no affiliation with the company other than buying a Bored Ape, which he talked about on two episodes of The Tonight Show.
Meanwhile, the value of a Justin Bieber Bored Ape has dropped by as much as 95%. Bieber paid $1.3 million for the NFT in January 2022, but it’s now worth nearly $60,000.