Sotheby’s, Madonna, Paris Hilton and Justin Bieber sued over Bored Ape NFTs

World-renowned auction house Sotheby’s is being sued alongside several major celebrities for the auction of over 100 images of cartoon monkeys.

According to The Times, Sotheby’s has been named as a defendant in a lawsuit alongside celebrities such as Madonna, Paris Hilton and Justin Bieber, who promoted the non-fungible token (NFT) collection Bored Ape Yacht Club.

A series of 10,000 collectable, digital monkey artworks, Bored Ape Yacht Club by Yuga Labs was for a long time considered to be among the most valuable NFT collections in the world.

The lawsuit is a sign of times, marking the sentiment of angry investors with nowhere else to turn as NFT values have plummeted over the last few years.

Investors claim that promotions by celebrities “artificially inflated” the price of the NFTs leading to financial losses. Scott+Scott claims that thousands of investors could collectively be owed more than $2 billion.

As for Sotheby’s, the auction house is being targeted for having “misleadingly promoted” the Bored Ape collection and attempted to “manipulate the price” of the collection, according to a US court filing submitted last Friday.

“The Sotheby’s stamp of approval played a big part in the deceptive promotion of the NFT collection as a legitimate investment,” said Sean Masson of the law firm Scott+Scott, which is representing investors.

“Unfortunately, Sotheby’s over-hyped auction turned out to be a farce that served as the starting point for the massive scheme alleged to have defrauded investors.”

Sotheby’s has said: “The allegations in this suit are baseless, and Sotheby’s is prepared to vigorously defend itself.”

Emerging in February 2021 as the NFT market first began to surge, Yuga Labs, first sold Bored Apes via a pre-sale event in April 2023 for 0.08 ETH, worth about $317 at the time.

Hitting the global NFT hype cycle at exactly the right time, by the end of August that year, the cheapest Bored Ape Yacht Club NFT available to purchase online was priced at $80,698, according to CoinGecko.

By now having released spin off collections such as Bored Ape Kennel Club (images of pet dogs for your pet monkey) and Mutant Bored Apes, Yuga Labs star was well on the rise.

Then in September 2021, Sotheby’s held an online auction via their metaverse marketplace for 101 Bored Ape Yacht Club NFTs. The collection was sold to an anonymous buyer for £24.4million or $51.7m, far exceeding the expectation that the NFTs would fetch between $20-30m.

This is where the issue becomes pointed.

Investors allege that following the auction, Max Moore, a Sotheby’s staff member, made a claim on social media that the items had been bought by a traditional buyer, that is, someone from the non-crypto world.

The lawsuit filing states that in reality the NFTs are believed to have been purchased by the collapsed crypto exchange FTX.

“Representations that the undisclosed buyer was a ‘traditional’ collector misleadingly created the impression that the market for BAYC NFTs had crossed over to a mainstream audience,” the filing claims.

“The misleading promotions of the auction by the company [Yuga Labs] and Sotheby’s successfully induced additional purchases of the BAYC NFT collection.”

Yuga Labs said: “We believe that these new allegations, like those in the previous iteration of this opportunistic complaint, are completely without merit or factual basis.”

A common ‘flex’ among the elite who want to show their taste-making abilities, owners of Bored Apes reportedly include Snoop Dogg, Jimmy Fallon, Post Malone, Mark Cuban, Shaquille O’Neal, Steve Aoki, Gwyneth Paltrow, and DJ Khaled, among others. It is not yet clear whether these names are also named in the lawsuit.

The most expensive Bored Ape NFT ever sold, Bored Ape #8817, reached a whopping $5.7million on the Sotheby’s metaverse marketplace. According to statistics site DappRadar, it is worth approximately $444,446 today.

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