Sotheby's Disputes Our Report About FTX and the Bored Ape Yacht Club Auction?
Revenge of the Traditional Collector? Sotheby's claims that "FTX was not the winning bidder" of their 101 Bored Ape auction. Wave takes a closer look at exhibits from Sam Bankman-Fried's trial.
In a September 12th court filing, Sotheby’s appears to dispute a report from Surfing the Waves.
At the beginning of this year, we reported that FTX purchased 101 Bored Ape Yacht Club NFTs at a Sotheby’s auction. The auction, which took place in September 2021, received a winning bid of $24.4 million. The auction winner was not publicly identified at the time.
Surfing the Waves was the only publication to identify FTX as the buyer of Sotheby’s Bored Apes.
In August, an ongoing class action lawsuit, Adonis Real v. Yuga Labs, Inc., added Sotheby’s as a defendant.
The first amended complaint in the lawsuit named Sotheby’s as a defendant for running a “deceptive auction” in collusion with Yuga Labs, the creators of BAYC. The complaint alleges that Sotheby’s representatives “misleadingly promoted” the auction and the Bored Ape collection. Consequently, the auction would help to generate legitimacy, hype, and investor interest around the Bored Ape brand.
In September, Sotheby’s filed a motion to dismiss. An attached filing disputes that FTX was the winning bidder of the Sotheby’s auction.
A footnote within the filing states: “If this case progresses, Sotheby’s will prove this allegation factually incorrect. FTX was not the winning bidder of the BAYC NFT auction.”
The Adonis Real complaint also references several other posts from Surfing the Waves, including “The Traditional Collector,” an article analyzing the widespread narrative that the anonymous winner of the auction was a traditional art collector or buyer.
Sotheby’s recent filing appears to re-affirm the original purported narrative that the winner of the auction was a traditional art collector as opposed to a cryptocurrency firm such as FTX or Alameda Research.
The footnote continues: “even if a Sotheby’s employee did make a ‘traditional collector’ statement, it would have been accurate.”
The Spreadsheet Exhibit
The matter is further complicated by the trial of Sam Bankman-Fried.
One exhibit included last week at Bankman-Fried's trial included an internal list of FTX’s investments on a spreadsheet. An item on that spreadsheet is labeled “BAYC (Sotheby Auction).”
The item is marked with a closing date of September 14, 2021 — five days after conclusion of Sotheby’s BAYC auction. The spreadsheet lists $24.4 million under “Investment amount” — the same amount as the winning bid at Sotheby’s BAYC auction. The spreadsheet identifies the lead as Brian Lee, former Partner at FTX Ventures.
If that information is accurate, it would seem to further confirm FTX as the true buyer.
In a separate exhibit from Bankman-Fried’s trial, a document from former Alameda CEO Caroline Ellison includes a note under a section titled “trading has been better lately” stating: “got short APE before the land drop ($15m).”
While it is unclear what the included figure precisely represents, the dating within this document likely implies that Alameda took a short position against ApeCoin before Yuga’s Otherside project launched in May.
Alameda Research is also suspected to be one of the recipients of secret multimillion dollar loans in the form of ApeCoin prior to the token’s public launch.
Alameda’s secret ApeCoin “loan” transpired on March 3, 2022. Just four days later, FTX closed a $50 million investment into Yuga Labs on March 7.1 Some point afterward, FTX/Alameda apparently opened the aforementioned ApeCoin short position.
A Night to Remember
Despite the high-profile players involved, the saga generated little interrogation from journalistic media, with the exception of a Vanity Fair article published shortly after our report.
Author Michael Lewis’ new book, Going Infinite, references the sale. Lewis writes that a former employee claims Sam Bankman-Fried bought the collection of 101 Bored Ape Yacht Club NFTs from Sotheby’s. It is unclear if the former employee is referencing firsthand knowledge or drawing inferences from media reports.
Although the extent of his personal involvement has not been publicly clarified, Bankman-Fried certainly had some knowledge of FTX’s Bored Apes.
On June 23, 2022, Casa Cipriani hosted the Moonlight Gala to honor Bankman-Fried and Ivan Soto-Wright, CEO and co-founder of MoonPay. Bankman-Fried was in attendance and spoke onstage.
FTX donated Bored Ape #9094 to be auctioned by Sotheby’s at the Moonlight Gala. Bored Ape #9094 was one of the 101 Bored Apes originally sold at Sotheby’s September 2021 auction.
#9094 was sold that night for over $400,000 to Adam Weitsman. The proceeds were donated to charitable causes.
In the end, Sotheby’s auctioned the same NFT twice: once in September 2021 for the “Ape In!” sale, and again nine months later at the Moonlight Gala honoring Bankman-Fried.
Where are the Bored Apes now?
The spreadsheet from Bankman-Fried’s trial indicates that FTX realized a net profit of over $9 million from their BAYC Sotheby’s auction investment. These figures are very likely incorrect. FTX sold many of the Apes on their proprietary US marketplace, via OTC deals, and via OpenSea — yet roughly one-third of the Bored Apes from the original Sotheby’s auction were never resold by FTX. The spreadsheet appears to assume that FTX fully exited their position on Bored Apes.
At the end of January 2023, FTX’s remaining Bored Apes were transferred to a wallet thought to be controlled by the FTX liquidators, just a few weeks after the Surfing the Waves report.2
FTX’s Bored Apes have been dormant since January. None of the NFTs have been sold via on-chain marketplaces. Meanwhile, Bored Ape prices have continued to plummet. Bored Ape prices are down over 50% since the January transfers. If the Bored Apes are intended for liquidation, this extended waiting period likely diminished expected returns by millions of dollars.
Sotheby’s did not return our request for comment, but provided a seemingly identical statement to outlets inquiring about the lawsuit. Derek Parsons, Sotheby’s Vice President of communications wrote in an email to Quartz: “The allegations in this suit are baseless, and Sotheby's is prepared to vigorously defend itself.”
Parsons previously told Surfing the Waves that Sotheby’s cannot comment on the identities of buyers, but that “there were notable traditional art collectors vying for the lot.”
According to the spreadsheet. The funding round, led by Andreessen Horowitz (a16z), was officially announced on March 22, 2022. MoonPay was also an investor in the round.
Also transferred were several Mutant Serums (originally bundled with the 101 Apes in Sotheby’s auction) and Otherdeeds (claimed by FTX/Alameda in May 2022 via their remaining Bored Apes) representing Yuga Labs’ metaverse project.