We spoke with Benedict Evans , a tech thinker who partners with Mosaic Ventures and Andreessen Horowitz, despite leaving a16z before leading Yuga Labs' $450 million funding round just before crypto winter.
"Does a real estate agent feel compelled to tell you that you're in a real estate bubble and shouldn't buy?" said Evans. "No. That's not your job. You still have obligations to the seller."
To learn more about the skyrocketing price of some NFTs, a high-profile lawsuit is pending in the US District Court for the Western District of the Central District of California against the founders of Bored Ape and their most famous fans. The 95-page complaint reads like an episode of Entourage , set at the height of the crypto craze in the early 1920s, featuring rappers, zeitgeist hustlers and celebrities: Diplo, The Weeknd, Gwyneth Paltrow, Snoop. Dogg, Post Malone, Future, Kevin Hart and finally The Chainsmokers. The lawsuit, which seeks class action status for Apes or ApeCoin buyers, weaves stories of alleged cryptocurrency scams, Hollywood machismo, social media spam, celebrity cults and bits of Bono. After all, it is claimed that the revival of Planet of the Bored Apes is nothing more than a ploy to make the apes look like assets bought by celebrities and art dealers worth millions. . The lawsuit alleges an arranged deal whereby famous and powerful people got their monkeys for free and were paid to promote the material, a fact they did not disclose.
"These high-profile celebrities are coming and they're going to cause spikes in price as they continue to interact with the ecosystem. You're part of the club and more and more people want to be part of the celebrity club to get there," said attorney John Jasnak, a partner at the law firm Scott + Scott based in San Diego who filed the case on behalf of two of the aggrieved owners of Bored Ape and ApeCoin named Adonis Real and Adam Titcher and another anonymous plaintiff. You."
You may have noticed in early 2022 that almost every celebrity is being paid by a crypto company – Stephen Curry is a spokesperson for FTX Bank, and various celebrities post Instagram stories on their prized NFTs. And then there's the Larry David Super Bowl commercial. According to the lawsuit, the alleged scheme began when Yuga Labs teamed up with music industry veteran Guy Assery, who manages Madonna and U2. Osiri, who is a defendant in the lawsuit, hired friends and well-known clients to buy and promote his NFTs.
However, the lawsuit alleges that Osiri and his company used a consumer-grade encryption app called MoonPay - think Venmo or PayPal, but for crypto - to enable "transactions" without exchanging money, allowing a bold name to never actually spend NFT money. they. they buy. Additionally, the lawsuit alleges that venture capital firm Oseary Sound Ventures (associated with Ashton Kutcher, who was not named as a defendant in the lawsuit), along with several other prominent Kera backers named elsewhere in the lawsuit, were the original investors in MoonPay. is, allowing them to "benefit financially from cross-fertilization and promotion of Yuga's financial products".
Together, Oseary, Defendants MoonPay, and Defendants Promoters share a strong incentive to use their influence to artificially create demand for Yuga Securities' securities, which in turn will increase use of crypto payment service MoonPay to sell them to meet new demand. ." bed suit. "At the same time, Osiri may also be using MoonPay to cover up how he pays his celebrities to directly or indirectly promote Yuga's financial products."
When asked to comment, a spokesperson for Yuga Labs said, “We consider these claims to be opportunistic and untrue. We firmly believe they are unnecessary and are eagerly awaiting the evidence." Last week, Osiri did not respond to a request for comment and the court said he was being granted a stay to respond to the suit.
A spokesperson for MoonPay said, "MoonPay certifies that all reputed customers will be charged the full NFT and service fee."
While the lawsuit is still in its early stages, it may have provided much-needed context for one of the most confusing conversations about screen consumption in the pandemic era: "I bought a monkey" between Jimmy Fallon . and Paris Hilton on The Tonight Show in January 2022, where the Kera-owning couple discuss the ins and outs of buying an NFT. Fallon said, in the somber tone of a man resigned to his thoughts, that he had chosen the Breton striped monkey because he liked striped shirts too. As if he didn't understand what he was talking about, Hilton suggested, "I saw you at the Beeple event and you said you got it through MoonPay." described Bored Apes as a multi-million dollar investment - a kind of Tinker Bell game - and attracted more and more buyers. According to the plaintiffs and their lawyers, celebrities who talk about their monkeys on social media or late-night TV become a public part of the program, where their hundreds of thousands of dollar NFTs led to ApeCoin's popularity. . This resulted in an initial funding of US$450 million and a valuation of US$4 billion.
Neither Fallon nor Hilton responded to last week's request for comment.
"Have you seen DJ Khaled ?" Prosecutor Yaskh asked me.
He was referring to a recording of DJ Khaled, a walking exclamation point in the hip-hop era, standing on a yacht looking at multiple cell phone screens while several people said to him “You bought a monkey! You bought a monkey! as Khaled staggered around in confusion.
"Yeah, that's really bad," Jasnoh said. "He just said, 'I don't know what that is.'"
In the world of auctions, selling the digital future is a relatively easy task: the house has to train connoisseurs of culture and convey the message that NFTs are art. Is Beeple's Everyday Life, a series of tens of thousands of drawings and illustrations, some sexist or downright wild, true art worthy of opening a downtown gallery and the exuberant private dinner at La Fresette that Beeple hosted for him last March? If you think about it, isn't it ridiculous to say something like "I saw life before the Beeple and after the Beeple - how the world thought before and after Christ", like Noah Davis, who sold the Beeple for 69 million suits. dollars at Christie's at the helm of the digital house. (Davis has left Christie's and is now the brand manager of Yuga Labs for CryptoPunks, another NFT offering. They would look like monkeys if they were comic book punks.)
But is it art, the auction house sells wine, constitutions, sneakers, watches, and first issues. If you sell, you sell it.
"It's like how Hollywood makes movies about Hollywood. They really take it," said Evans, our cryptosherpa. Like, yeah, I'll take the money.
Auction houses have their own standard explanations for why certain NFTs should be considered art, to ensure it's for the seller and not the buyer. Did Beeple really "achieve something historic" when Christie's placed its NFT "Walking Man" statue among paintings by Issy Wood and Stanley Whitney in tonight's sale?
Yasnoch, an attorney for the plaintiffs in the Yuga lawsuit, tried to thread the needle by comparing Bored Ape's NFT and their crypto supplement ApeCoin. The former can be considered a work of art in a broad sense. The latter is a purely monetary unit with no artistic value, which it regards as regulated. Due to the close interdependence of the two departments, things get complicated and lawyers come into play.
"I think the concept of an NFT can have intrinsic value and tokens can represent value in a number of ways, and I think there's value in people liking the look of art," he said. "But in terms of it being a financial product and how it's sold and how it's sold, it's really an unregistered security that has to be properly disclosed. And as soon as they themselves started creating all the hype around Bored Ape, they released the ApeCoin token, which even doesn't look like a work of art or anything. And it's just an unregistered title used for speculation and trading."
Evans came up with another puzzle. When something is on the market selling for a high price, society understands that it has a legitimate value. Someone may not like this work, but it has its origins and the artist is either in a museum collection or has historical significance, which makes it at least a curiosity.
“When you buy vintage vinyl or rare sneakers or Marilyn Monroe shoes or Salvador Dali prints or whatever, you get something that has no physical value but has cultural value,” says Evans. “There's a deep cultural base that believes Jordan shoes are a treasure, the early Sex Pistols vinyl is a treasure. And the problem with all these NFTs is you don't really know there's such a broad, deep cultural base. It was just, "Oh my god someone just bought it for 200,000."
For now, some in the art world still claim that NFT dedication can lead to some sort of profit. Sotheby's Metaverse is on sale now. It features early NFTs by artist Sebastián Salgado, but they don't quite cover it. They cost $250 each. In 2021, sales of Native Digital raised $17 million for Sotheby's, of which $11 million was paid for one CryptoPunks series NFT.
But in February 2022, Sotheby's held a sale where a set of 104 cryptopunks was expected to sell for up to $30 million, only to see the item fall apart minutes before the hammer was struck as the shipper backed off, possibly due to a lack of interest from secondary bidders. Last December, Native Digital's sales seemed to have completely lost its shine. Sotheby's offered Keith Haring's first NFT as its main auction lot, but it sold for $25,000, well below the $80,000 estimate.