Sotheby’s & Artist Sued Over Who Owns ‘First-Ever’ NFT, Sold For $1.5M
Last year, Sotheby’s sold artist Kevin McCoy’s Quantum, widely regarded as the first-ever non-fungible token (NFT), for nearly US$1.5 million during its inaugural Natively Digital sale.
Now, it appears that the auction house and McCoy are being sued by a holdings company, with the owner claiming to be the rightful owner of the digital art piece. The unnamed plaintiff is suing under the company Free Holdings.
According to ARTnews, the NFT in question differs from those many have grown accustomed to, as instead of being minted on the Ethereum blockchain, McCoy used the NameCoin software to create the digital asset instead.
On this software, owners have to reclaim their creations every 250 days, or their ownership of the asset will expire. The lawsuit is claiming that McCoy’s ownership of Quantum had lapsed, and it was left unclaimed for years.
Blockchain technology is used to provide a permanent record of the ownership of an asset, though reality has shown it is often less clear cut as buyers and sellers transfer the content and its rightful ownership across blockchains and various auctions.
The problem here lies in the fact that when McCoy participated in the Sotheby’s auction, he sold an Ethereum-based NFT of the work, having transferred the rights of the previous NameCoin NFT to the newly-minted one. However, Free Holdings doesn’t agree.
As per The Art Newspaper, Twitter user @EarlyNFT, who is the sole owner of Free Holdings, had already registered as the owner of the unclaimed Quantum NFT on NameCoin. Despite multiple attempts to contact McCoy over the next month via the social media platform, the plaintiff received no response from the artist.
The issue becomes less clear with reference to a condition report by Nameless Company, which stated that “this specific NameCoin entry was removed from the system after not being renewed, and was effectively burned from the chain,” casting doubt on Free Holdings’ claim to have re-registered the token under its ownership.
It’s been reported that the plaintiff had reached out to Sotheby’s Senior Vice President, Caroline Moustakis, alerting her to the fact that the auction house’s sale was “inaccurate and misleading” as the NameCoin was still under the ownership of Free Holdings.
Sotheby’s has since called the allegations “baseless,” and said it will “vigorously defend itself” in the dispute.
[via ARTnews and The Art Newspaper, cover image via Sotheby’s]
