Sotheby's auction house said it would sell a digital art collection that was part of defunct crypto hedge fund Three Arrows Capital.
In an announcement on April 19, Sotheby’s said it would auction non-fungible token (NFT) artworks that are part of 3AC’s digital portfolio in 2021. The company will begin auctioning off seven NFTs that are part of its 2020 "Holy Grail" collection, with May described as "some of the highest quality and rarest works," according to Michael Bouhanna, head of digital art at Sotheby's.
Sotheby's auctions include Zombie CryptoPunk #6649 and Autoglyph #187 from Larva Labs, and Dmitri Cherniak's "The Golden Goose," which was purchased in August 2021 by 3AC co-founders Su Zhu and Kyle Davies. They paid 1,800 Ether about $5.8 million at the time for this piece. Three Arrows was a cryptocurrency-friendly hedge fund that went bankrupt in the 2022 market crash. As part of the proceedings, consulting firm Teneo said in February that it planned to sell 3AC’s digital collection excluding the firm’s “Starry Night Portfolio” in an effort to “realize the value of NFTs for liquidation.”
“From the beginning, Three Arrows’ joint liquidators have been conducting a thorough process to identify and recover company assets,” Teneo said in a statement to Cointelegraph. "We have chosen to partner with Sotheby's Digital Art team for the sale of this vast collection of NFTs because we believe they bring a best-in-class approach that will ultimately maximize the value of these assets on behalf of all creditors."
The whereabouts of Davis and Chu are largely unknown due to the collapse of 3AC. However, with Davis at risk of being held in contempt of U.S. bankruptcy court for failing to respond to a subpoena, the co-founders remain active on social media channels. In April, the pair backed the launch of a new crypto project called Open Exchange. Sotheby's is one of the first major auction houses to launch a dedicated marketplace for digital artwork and NFTs in 2021, many of which fetch multimillion-dollar prices. Pieces included in the platform's listing include an NFT of former Twitter CEO Jack Dorsey's first tweet, numerous CryptoPunks, and the original manuscript of the book that coined the term "metaverse."
