Sotheby’s NFT sale, expected to reach $30 million, was suddenly canceled

At Sotheby’s Wednesday night, a single batch of NFTs — 104 digital art assets known as CryptoPunks — was expected to sell for as much as $30 million. But after a delay of 25 minutes after the auction’s expected start time, the sale was off.

The consignor had withdrawn the pixelated collectibles and posted a meme on Twitter mocking the auction house.

The crowd inside a packed Sotheby’s saleroom was shocked, according to two attendees. The evening began with people drinking champagne and ended with an astonishing shuffle back home.

Derek Parsons, a spokesman for Sotheby’s, said in a statement Wednesday night that “the lot was withdrawn prior to the sale following discussions with the consignor,” but he did not share details of how the deal fell apart.

“People were extremely upset,” said Kent Charugundla, a telecom investor and NFT collector who attended the event.

“This is so bad for the NFT community,” he added, explaining that the market needed strong selling to continue its momentum.

Until a year ago, sales of NFTs (nonfungible tokens), a type of blockchain-based collectible, were extremely rare. But after artists like Beeple and Pak sold them for tens of millions of dollars, gallerists, collectors, celebrities and even thieves took notice.

The NFT boom, which some estimate generated more than $25 billion in sales last year, has also raised questions about a possible NFT bust as Bitcoin and other cryptocurrencies see their values ​​fall.

Todd Levin, an art consultant who has worked for the auction house, said auction withdrawals usually happen when there are legal concerns or fears that a piece’s reserve price will not be met.

“Withdrawal is really the absolute last choice,” Levin said. “Auction houses do their best to curate these sales in advance.”

Larva Labs created CryptoPunks in 2017 as a generative project consisting of 10,000 pixelated characters. Dozens of these early NFTs have each sold for more than $1 million in Ethereum cryptocurrency, with total sales of more than $2 billion, according to the Larva Labs website.

Sotheby’s said the 104 CryptoPunks were purchased in a single blockchain transaction by an anonymous collector who goes by 0x650d online.

When the auction was announced, Michael Bouhanna, Sotheby’s co-head of digital art, had described the sale in a press release as “a monumental occasion” that celebrated CryptoPunks as “one of the most recognizable visual styles that has become synonymous with the digital art movement.”

The collector did not immediately respond to multiple requests for comment through the auction house and social media. On Twitter, 0x650d posted two cryptic messages about the auction. ONE first post declared the decision to “hodl,” crypto-speak for holding onto digital assets. So they shared a meme with musician Drake, claiming they “took punks mainstream by roughing up Sotheby’s.”

In the crypto industry, hoarding is when developers intentionally siphon an investor’s funds and run away from the project.