At Sotheby’s on Wednesday night, a single lot 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 past 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The consignor had withdrawn the pixelated collectibles and posted a meme on Twitter mocking the auction house.
Audiences inside a packed Sotheby’s salesroom were shocked, according to two attendees. The evening began with people drinking Champagne and ended with a stunned shuffle back home.
Derek Parsons, a Sotheby’s spokesman, said in a statement Wednesday night that “the lot was withdrawn prior to the sale following discussions with the consignor,” but he did not share details of how the deal fell apart.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 sales to continue its momentum.
Until a year ago, sales of NFTs (nonfungible tokens), a type of blockchain-based collectible, were exceedingly 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 to have generated more than $25 billion in sales last year, has also raised questions of an eventual NFT bust as Bitcoin and other cryptocurrencies see their values drop.
Todd Levin, an art adviser who has worked for the auction house, said that auction withdrawals typically happen when there are legal concerns or a fear that a lot’s reserve price will not be achieved.
“Withdrawal is really the absolute last choice,” Levin said. “Auction houses do their very best to curate these sales in advance.”
Larva Labs created the 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 overall sales totaling more than $2 billion, according to the Larva Labs website.
Sotheby’s said that the 104 CryptoPunks were bought 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 news release as “a monumental occasion” that celebrated CryptoPunks as “one of the most recognizable visual styles that have 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. A first post declared the decision to “hodl,” crypto-speak for holding onto digital assets. Then they shared a meme featuring the musician Drake, claiming that they were “taking punks mainstream by rugging Sotheby’s.”
In the crypto industry, rug pulls are when developers intentionally siphon an investor’s funds and run away from the project.