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Sotheby’s $221.3 Million Impressionist and Modern Sale Was Solid, But Proves the True Market Fireworks Are Elsewhere


Sotheby’s Impressionist and Modern art evening sale capped off a marathon night that saw collectors welcomed back to its New York salesroom for the first time in over a year.

The offering of 33 lots (one was withdrawn just prior to the sale) pulled in a solid total of $221.3 million, just under the original high estimate of $222.8 million. (The estimate was revised downward after the withdrawal, to $166.9 million–219.3 million.) Of the lots offered, 31, or 94 percent, found buyers.

These final results belied uneven appetites. Aside from intense competition for a handful of star lots, particularly from Asian buyers, the action was unpredictable. Certain works sold far below their estimates, suggesting some reserves had been lowered in the lead-up to the sale due to lackluster interest. (Unless otherwise stated, final prices include auction-house premiums; presale estimates do not.) 

The top lot of the evening, Claude Monet’s Le Bassin aux nymphéas (1917–19), sold for $70.3 million, well over its estimate of around $40 million. That’s more than four times the $16.8 million price it made at Sotheby’s in May 2004. This time around, the work went to a client of specialist Gregoire Billault in New York after fierce competition from Hong Kong. It is now the fifth priciest Monet ever sold at auction.

Art law specialist Thomas Danziger represented clients from the estate of Philadelphia philanthropist Tristram Colket, an heir to the Campbell’s soup fortune, who consigned four major works to the sale

Danziger summed up the mood, telling Midnight Publishing Group News: “Generally good sale results, but hard to square the selling price of a spectacular Cézanne with the price achieved by a Bitcoin Banksy.” (He was referencing a $12.9 million Banksy in the contemporary sale that evening, which more than doubled its $5 million high estimate and marked the first time that Sotheby’s said it would accept cryptocurrency as a form of payment for a physical work.)

Paul Cezanne, Nature morte pommes et poires (Circa 1888-90). Image courtesy Sotheby's.

Paul Cézanne, Nature morte pommes et poires (Circa 1888–90). Image courtesy Sotheby’s.

Two of Colket’s works, which did not carry guarantees, hammered below or near their low estimates. A Cézanne still life, Nature morte: pommes et poires (circa 1888-1890), sold for $19.9 million with premium, far short of its published $25 million to $35 million estimate.

The muted reception was similar for Colket’s Degas dancer, Danseuse (circa 1880–87), which sold for a hammer price of $10 million—exactly the low estimate—to a Sotheby’s specialist in London. Of the final two Colket works (both Monets), a landscape failed to sell and a floral still life sailed past its $6 million high estimate to fetch $10 million.

One of the rare works that sparked protracted bidding was Picasso’s Femme assise en costume vert (1953), a portrait of the artist’s lover and mother of two of his children, Françoise Gilot. Sotheby’s Asia chairman Patty Wong won it on behalf of a client for $20.9 million with premium. 

Amedeo Modigliani, <i>Jeune fille assise, les cheveux dénoués (Jeune fille en bleu)</i> (1919). Image courtesy Sotheby's.

Amedeo Modigliani, Jeune fille assise, les cheveux dénoués (Jeune fille en bleu) (1919). Image courtesy Sotheby’s.

Toward the end of the sale, the intensity picked up again for a painting by Diego Rivera, Retrato de Columba Dominguez de Fernandez (1950). The final price with premium was $7.4 million, far above the $2 million to $3 million estimate.

Another notable element of the evening was the structure of guarantees—including the volume that Sotheby’s fronted itself and then farmed out to third parties to offload some of the risk. A week prior to the sale, just one of 10 guaranteed lots was backed by an outside bidder. That figure rose to 11 out of a total of 14 guaranteed lots by the time the sale kicked off on Wednesday.

Pablo Picasso, <i>Femme assise en costume vert</i> (1953). Image courtesy Sotheby's.

Pablo Picasso, Femme assise en costume vert (1953). Image courtesy Sotheby’s.

One of the works that secured a guarantee in the run-up to the sale was Amedeo Modigliani’s Jeune fille assise, les cheveux dénoués (Jeune fille en blue), which carried an estimate of $15 million to $20 million. It hammered for $14 million after protracted competition between two specialists, including Helena Newman in London, for whom it was almost breakfast time as the sale came to a close.  

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How a Brazen Hack of That $69 Million Beeple Revealed the True Vulnerability of the NFT Market (and Other Insights)


Every Wednesday morning, Midnight Publishing Group News brings you The Gray Market. The column decodes important stories from the previous week—and offers unparalleled insight into the inner workings of the art industry in the process.

This week, clawing down another art-tech rabbit hole…

 

MINT CONDITION

In the opening days of April, an artist operating under the pseudonym Monsieur Personne (“Mr. Nobody”) tried to short-circuit the NFT hype machine by unleashing “sleepminting,” a process that complicates, if not corrodes, one of the value propositions underlying non-fungible tokens. His actions raise thorny questions about everything from coding, to copyright law, to consumer harm. Most importantly, though, they indicate that the market for crypto-collectibles may be scaling up faster than the technological foundation can support.

Debuted as part of an ongoing project titled NFTheft, sleepminting serves as a benevolent but alarming crypto-counterfeiting exercise. It aims to show that an artist can be made to unconsciously assert authorship on the Ethereum blockchain just as surely as a sleepwalking disorder can compel someone to waltz out of their bedroom while in a deep doze.

Remember, to “mint” an NFT means to register a particular user as its creator and initial owner. Theoretically, this becomes the first link in a verified, unbreakable chain of custody tethered to an NFT for the life of the underlying blockchain network. Thanks to this perfectly complete, perfectly secure, and eternally checkable data record, the argument goes, potential buyers can trust non-fungible tokens without necessarily having to trust their owners or sellers. These traits add a valuable layer of security that traditional artworks could never rival with their eternally dubious off-chain certificates of authenticity and provenance documents.

Personne may have found a way to dynamite this argument for much of the art NFT market. Sleepminting enables him to mint NFTs for, and to, the crypto wallets of other artists, then transfer ownership back to himself without their consent or knowing participation. Nevertheless, each of these transactions appears as legitimate on the blockchain record as if the unwitting artist had initiated them on their own, opening up the prospect of sophisticated fraud on a mass scale.

To prove his point, on April Fool’s Day, Personne sleepminted a supposed “second edition” of Beeple’s record-smashing Everydays: The First 5,000 Days, the digital work and accompanying token that sold for a vertigo-inducing $69.3 million via Christie’s less than a month earlier. (My emails to Beeple and his publicist about the situation went unanswered.)

In our ensuing email exchange, Personne claimed he then gifted the sleepminted Beeple (Token ID 40914, for the real crypto-heads) to a user with the suspiciously appropriate handle Arsène Lupin, an homage to the famous “gentleman thief” created by Maurice Leblanc and recently reincarnated in a hit Netflix show. (Personne denied he was Lupin to the blog Nifty News.) Lupin then turned around and offered the sleepminted Beeple for sale on Rarible and Opensea, two of the largest NFT marketplaces—both of which eventually deactivated the listings. (Neither Rarible nor Opensea replied to my emails seeking comment.)

Why publicize any of this, you ask? Personne essentially sees himself as a so-called white hat hacker, meaning an ethics-driven coder who exploits technological flaws strictly to demonstrate how they can be fixed. He is a staunch believer in the potential of NFTs and crypto. However, he believes major “security issues and vulnerabilities” in smart contracts have been glossed over to make way for the gold rush. He also claimed to have launched the NFTheft project only after the crypto-community largely ignored or derided his attempts to spark earnest conversation.

The goal I want to achieve with this is to take the most expensive and historic NFT, and show that if it is not protected, how can we guarantee that any NFT is safe from intentional malice, fraud, forgeries, theft, etc.?” he wrote.

Although the sleepminting saga is hairier than a Haight-Ashbury commune, I think we can chop through the overgrowth using two questions with serious stakes for different participants in the NFT market. 

Screen grab of the NFTheft website showing details of the "sleepminted" token.

Screen grab of the NFTheft website showing details of the “sleepminted” token.

1. What does sleepminting tell us about the technological vulnerabilities of art-related NFTs?

 

Short Answer

The main smart contract driving the market might not be smart enough to secure the frenzied level of buying and selling we’ve seen in 2021.

 

Longer Answer

What’s clear is that Personne is exploiting a flaw in the standard ERC721 smart contract, which is used by the overwhelming majority of art-related NFTs transacting on the Ethereum blockchain. But it is not an easy-to-see flaw, and the effect is not being faked by Photoshop wizardry or some other non-crypto chicanery; the sleepminted Beeple really is minted in Beeple’s wallet, it really is transferred elsewhere afterwardand both of those transactions are memorialized forever on the blockchain. 

How, exactly, is Personne doing this at the level of code? He declined to elaborate, saying only that he would publicly reveal the details before initiating the next stage of the NFTheft project. Other crypto-fluent folks I talked to needed more time to investigate than my deadline would allow. But Personne revealed in one tweet that he had deployed a “custom-built” contract that did not have an unnamed ERC721 “security check in place,” allowing him to move the token from wallet to wallet without meeting the typical conditions (for instance, a buyer sending funds to meet a set sales price).

Good luck identifying the flaw, though. Kevin McCoy, the creator of the first NFT, tried running Personne’s sleepminting smart contract through a decompiler to get more insight into the source code. His highly technical, highly candid snap take on the results was that they were “fucking crazy” with “all kinds of shit going on,” but he could not decipher the actual function responsible for the mischief.

What McCoy could detect was that Personne’s customization was substantially larger and more expensive to deploy than a typical ERC721. The sleepminting contract consists of around 4,000 lines of code and cost 1.04 ETH, or about $2,500, in gas fees—roughly 12.5 times as much as it would usually cost to mint an average ERC721 token, if not more. (“Gas fees” are the term of art for the expenses charged to conduct a transaction on the Ethereum blockchain, with the price changing based on the network’s available computational resources.)

A courtroom sketch of Domenico De Sole on the witness stand with the fake Rothko painting he bought from Knoedler gallery. His case, which was separate from the one that jus settled, was the only one to go to trial. Photo: Elizabeth Williams, courtesy Illustrated Courtroom.

A courtroom sketch of Domenico De Sole on the witness stand with the fake Rothko painting he bought from Knoedler gallery. Photo: Elizabeth Williams, courtesy Illustrated Courtroom.

Why It Matters

Sleepminting is likely more sophisticated than the average NFT buyer’s understanding of the technology, making those buyers unlikely to question what appears to be blockchain-verified authorship.

This is especially important because we’re in a market frenzy for NFTs right now. Thorough vetting falls by the wayside whenever under-informed buyers flood into a largely unregulated space. Fraudsters have made millions in the past selling fake Jackson Pollocks on eBay, and the Knoedler forgery scandal proved that even knowledgeable collectors can be susceptible to high-level chicanery.  

I can’t rule out that a savvy crypto-collector might be able to detect a giveaway in either a sleepminting contract or its data trail. It’s also true that, even without Personne publicizing what he’d done, market players could use off-chain research to find out whether Beeple actually minted a second edition of Everydays—just as, say, Warhol collectors could consult the catalogue raisonné to make sure a particular Marilyn canvas is regarded as authentic.

Still, if bad actors began exploiting vulnerabilities in ERC721 contracts, it could theoretically plunge the NFT market into a forgery crisis on par with the antiquities market, where recent research showed that up to 80 percent of what is offered online is likely either looted or fake. 

Incidentally, Personne alleges that 80 percent of the NFTs on the market are “invalid and need to be redone” because of their vulnerability to sleepminting. That’s a difficult estimate to corroborate. But even if he’s overshooting by two or three times, the financial exposure would swell to millions of dollars in art-related NFTs alone. Isn’t that a prospect worth investigating?

A courtroom setup awaiting a witness. Photo: Friso Gentsch/dpa (Photo by Friso Gentsch/picture alliance via Getty Images)

A courtroom setup awaiting a witness. Photo: Friso Gentsch/dpa (Photo by Friso Gentsch/picture alliance via Getty Images)

2. Does sleepminting violate any U.S. laws? 

 

Short Answer

The legal exposures are murky and hard to act on, but they exist. In a way, that’s the point.

 

Longer Answer

At present, NFTs still occupy a legal gray zone. As of my writing, multiple cases pending in the U.S. could influence their ultimate classification. What’s unclear is how much immunity a sleepminter would have based on the lingering ambiguity.

Personne told me that, after being “thoroughly consulted and advised by personal lawyers and specialist law firms,” he is confident there are “little to no legal repercussions for sleepminting.” His argument is that ERC721 smart contracts only contain a link pointing to a JSON (Javascript Object Notation) file, which in turn points to a “publicly available and hosted digital asset file”here, Beeple’s Everydays image. (Remember, the NFT is almost never the artwork itself.)

He likened the idea of suing him to the “absurd” prospect of Apple suing “every single pedestrian for viewing or photographing their billboard in Times Square.” 

But multiple prominent art attorneys I spoke to felt Personne is standing on shakier legal ground. “If the hacker is not trying to pass the sleepminted work off as authentic and charging money for it, then he is probably not in any danger of being charged with criminal fraud,” said Steven Schindler. “If he were to be misrepresenting the nature of the NFT, and selling the works under false pretenses, then he would certainly be open to charges of fraud.”

But fraud isn’t the only issue at play here. Let’s return to Personne’s contention that the token merely points to a publicly viewable digital file. Querying the blockchain seems to show that the original Everydays NFT and Personne’s sleepminted “second edition” have two different URIs—essentially, the alphanumeric code identifying the actual image file that the token grants ownership to. This implies he downloaded the original file and re-uploaded it to a different online location. 

Further, it looks like he did so without making any changes to the work that could be positioned as “transformative,” like, say, Richard Prince cropping out the Marlboro ad copy in his Cowboys” photographs, or adding nonsensical comments to other people’s Instagram selfies in his New Portraits” series. (Two copyright infringement cases on the latter are currently pending in the Southern District of New York.)

Richard Prince. Photo: Patrick McMullan

So even though the sleepminted token is not the artwork, it still needs to point to the artwork in order to mean anything. If Personne made this happen by reuploading an unaltered digital copy of Beeple’s Everydays, as the URI suggests, then that could very well still qualify as unauthorized reproduction of an artwork whose copyright Beeple still owns.

In short, it’s possible a court could find him liable to be “in violation of Beeple’s exclusive right to publicly display his work,” according to Megan Noh, co-chair of art law at Pryor Cashman.

Personne may also be running afoul of what’s known as the Lanham Act, specifically a clause known as “false designation of origin.” Remember, the entire point of sleepminting is that its unauthorized attribution to Beeple appears legitimate on the blockchain. These claims are reasserted in the details of the sleepminted token on the NFTheft website (“Creator: Beeple (b. 1981)”) as well as the listings on Rarible and Opensea. 

The ‘statements’ on the website and/or created by the intentionally-manipulated metadata feel a lot like ‘false designations of origin,’ which could give rise to liability,” Noh said. “But there’s also an interesting question about whether an NFT can be considered a ‘good or service,’ which it would need to be for this area of the law to apply.”

Screen grab of the Rarible listing for the sleepminted token, showing the current owner as Arsene Lupin and the creator as Beeple.

Screen grab of the Rarible listing for the sleepminted token, showing the current owner as Arsene Lupin and the creator as Beeple.

Why It Matters

Personne’s copious public proclamations that the sleepminted NFT was not, in fact, authorized by Beeple may not protect him in a U.S. court—precisely because he engineered the blockchain to say otherwise. If a sleepminted token truly made it out “in the wild,” as Personne told me it did, then his exposure could only increase as the token moved through the secondary market to buyers who may be less aware of the NFTheft site, his social media presence, and any other links back to his white-hat rhetoric. 

That said, anyone who wanted to sue Personne would likely first have to untangle his identity, since it’s not easy to bring a pseudonymous party to court. Again, good luck.

Incidentally, this is one of the reasons it still seems unlikely to me that Lupin, the pseudonymous owner of the sleepminted NFT, is anyone other than the same person behind… uh, Personne. The best way to protect yourself from misunderstandings by subsequent owners is to ensure there are never actually any subsequent owners. 

Debating the legality of this particular episode misses the larger point, though. 

The NFTheft project aims to show that a gigantic proportion of the art NFT market is vulnerable to such malicious intent because of a structural flaw in the standard smart contract. If Personne were a bad actor, he could have sleepminted a much less famous NFT, kept quiet about his custom smart contract, and started selling directly to the most naive buyers he could find. That real people could be tricked into losing real money, and that anyone undertaking the ruse could plausibly be found liable for damages, reinforce why Personne’s gambit is worth our attention. 

We have already seen sophisticated hacks siphon tens, even hundreds, of millions of dollars out of cryptocurrency exchanges, decentralized financial entities, and blockchain-based “smart” organizations. Maybe it was only a matter of time before someone figured out a way to do the same to the part of the NFT marketplace that relies on ERC721 contracts. The question is whether the biggest and most influential players will take action before the black hats dig in.

[NFTheft]

 

That’s all for this week. ‘Til next time, remember what Upton Sinclar said: It is difficult to get someone to understand something when their salary depends on them not understanding it.

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The Buyers of the $69 Million Beeple Reveal Their True Identities—and Say the Purchase Was About Taking a Stand for People of Color


In a blog post on Thursday with the opaque title “NFTs: The First 5,000 Beeples,” the previously pseudonymous players behind the headline-grabbing $69-million sale of digital artist Beeple’s Everydays: The First 5,000 Days revealed their true identities. They are Vignesh Sundaresan, aka Metahovan, and Anand Venkateswaran, aka Twobadour.

Sundaresan was an early investor in Etherium and has backed Bitcoin ATMs, among other ventures. Twobadour is a “wordsmith” and “crypto tinhorn,” according to his Twitter bio.

In their post, they did a lot more than simply reveal their names.

Sundaresan and Venkateswaran also lay out a motivation for the purchase. The record-breaking auction buy, they say, was a self-consciously anti-racist statement. “The point was to show Indians and people of color that they too could be patrons, that crypto was an equalizing power between the West and the Rest, and that the global south was rising,” write Sundaresan and Venkateswaran.

Screenshot of the Twitter profile of Vignesh Sundaresan, aka Metahovan.

Screenshot of the Twitter profile of Vignesh Sundaresan, aka Metahovan.

Notably, the post detailing their identities came four days after independent crypto journalist Amy Castor wrote a viral blog post outing Sundaresan and Venkateswaran as the likely investors behind the spectacular Christie’s sale. Castor, who is highly critical of both cryptocurrency and NFTs, raised a series of questions about Sundaresan’s past business dealings.

Sundaresan, in turn, had written to Castor asking her to remove the post from the internet, citing unspecified “factual inaccuracies.”

The new post by Sundaresan and Venkateswaran also comes a day after I wrote a post for this site spotlighting images in the $69-million digital mosaic that were troubling or offensive, including ones titled it’s fun to draw black people! and a fat nerdy chinese kid and his imaginary friends.

Screenshot of Twitter profile of Anand Venkateswaran, aka Twobadour.

Screenshot of Twitter profile of Anand Venkateswaran, aka Twobadour.

Nevertheless, the two investors stress that successfully landing Beeple’s work should be read as a challenge to the whiteness of the art industry. “Imagine an investor, a financier, a patron of the arts,” the duo write. “Ten times out of nine, your palette is monochrome. By winning the Christie’s auction of Beeple’s Everydays: The First 5000 Days, we added a dash of mahogany to that color scheme.”

This statement about the importance of representation may seem somewhat odd coming from two men who obscured their identities behind gamer-style pseudonyms Metakovan and Twobadour. (They spoke to Midnight Publishing Group News last week about the buy without revealing their names.) “[T]hese pseudonyms were never meant to be masks. They are exosuits,” the duo write obliquely in the post. “Today, Vignesh wears Metakovan and Anand wears Twobadour, but there can be others who wear them in time.”

Even as the post can be read as an implicit response to the intense journalistic and critical scrutiny of the Beeple sale, it also doubled as an announcement that Sundaresan and Venkateswaran would be investing in an alternative pro-crypto-art media ecosystem of their own.

The duo announced the launch of the Metapurse Fellowship, which will begin by employing five “storytellers” who will receive $100,000 each delivered in monthly stipends over the course of a year. (For those who don’t know how much art criticism usually pays, know this: $100,000 is a lot.)

There are three qualifications for applicants. First, they must have a portfolio of work. Second, they must have personally created at least one NFT. And third, “no anti-coiners allowed :)”—meaning that skepticism or criticism of the crypto or NFT space disqualifies you.

“The grant is open worldwide,” they write, “to young and old, pseudonymous and named alike.”

The rest of the post details the business backgrounds of Sundaresan and Venkateswaran, and makes the case for Metapurse, the crypto-art investment vehicle they run, which purchased Beeple’s $69-million work at Christie’s. Metapurse’s investment model is owning a bundle of NFT artworks. However, rather than buying and selling these directly, they have created a B20 “token” that fans and investors can purchase, a fractionalized ownership stake in the digital art assets that can be traded as an asset of its own.

Prior to the acquisition of Everydays last week, the Metapurse fund purchased 20 art pieces of Beeple’s for $2.2 million to add to its portfolio (you can hear Venkateswaran talk about the machinations behind that purchase in a YouTube clip linked to from their post).

“For having made all of this possible with his incredible work, we gave Beeple 2% of the tokens, as a token of appreciation,” they explain in the recent post. This means that Beeple essentially owns 2 percent of the fund that purchased his work at auction.

The value of the B20 token since its launch, from CoinMarketCap.com.

The value of the B20 token since its launch, from CoinMarketCap.com.

According to CoinMarketCap, the price of a B20 token was trading at about $2 in mid-February, before spiking to $26 in the lead up to the Christie’s sale, and then falling since. It is at about $9 as of this writing.

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A Netflix True Crime Series Will Investigate the Brazen Robbery of $500 Million in Artworks From the Isabella Stewart Gardner Museum


Netflix’s latest true crime documentary will revisit the infamous heist at Boston’s Isabella Stewert Gardner Museum, an unsolved robbery in which a pair of thieves posing as policemen tied up a night watchmen and made off with 13 masterpieces by the likes of Rembrandt, Johannes Vermeer, Edgar Degas, and Édouard Manet, collectively worth an estimated $500 million.

Next week marks the 31st anniversary of the break-in, carried out in the wee hours of the morning amid St. Patrick’s Day celebrations. There is still a $10 million reward for information leading to the paintings’ return, and it remains the most expensive art theft in US history.

Over the decades, the daring robbery has inspired a PBS documentary and numerous books, podcasts, and even works of art.

The new show, titled This Is a Robbery: The World’s Biggest Art Heist, is a four-part series by brothers Nick and Colin Barnicle, Boston natives who shared a boyhood fascination with the crime. It comes out on April 7.

This is how police found Isabella Stewart Gardner Museum night watchman Rick Abath after the theft. Two thieves posing as policemen tied him in up in the museum basement. Photo courtesy of the Isabella Stewart Gardner Museum, Boston.

This is how police found Isabella Stewart Gardner Museum night watchman Rick Abath after the theft. Two thieves posing as policemen tied him in up in the museum basement. Photo courtesy of the Isabella Stewart Gardner Museum, Boston.

No one has ever been arrested or tried in connection with the case, leading to any number of theories about what really happened and where the paintings are. Both the Italian mafia and the Irish mob are suspected of being involved, and efforts to recover the works have spanned continents.

The FBI announced in 2013 that it had identified the two thieves who carried out the break-in, but never released their names. Some law enforcement sources have reportedly identified them as George Reissfelder and Lenny DiMuzio, both of whom died shortly after the robbery.

This Is a Robbery promises a tale of “equal parts drama, explosive true crime story, and a madcap comedy of errors,” producer Jane Rosenthal told Deadline.

A list of motion detector alarms triggered by thieves during the 1990 Isabella Stewart Gardner Museum heist. Photo courtesy of the Isabella Stewart Gardner Museum, Boston.

A list of motion detector alarms triggered by thieves during the 1990 Isabella Stewart Gardner Museum heist. Photo courtesy of the Isabella Stewart Gardner Museum, Boston.

The only living suspect linked to the crime, reputed New England mobster Robert Gentile, broke his silence last month, but insisted that allegations about his involvement were an “out and out lie.”

“Even if you’ve read all the books, if you’ve listened to anything on it, there’s going to be new things in there,” Colin Barnicle told the Boston Globe. “And we reach a conclusion.”

See the trailer for the docuseries below.

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