The auction house Sotheby‘s has announced that it will dispose of a collection of digital art created by the shuttered crypto hedge fund Three Arrows Capital.
Sotheby’s announced that it would auction off nonfungible token (NFT) artwork compiled as part of 3AC’s digital portfolio in 2021. Sotheby’s head of digital art, Michael Bouhanna, has announced that the Grails collection, consisting of seven rare and high-quality NFTs, will be the first to go up for auction in May.
Sotheby’s will auction zombie CryptoPunk #6649 and Autoglyph #187 from Larva Laboratories, as well as “The Golden Goose” by Dmitri Cherniak, which was bought by co-founders of 3AC, Su Zhu and Kyle Davies in 2021. They purchased the piece for 1,800 Ether or approximately $5.8 million at the time.
Three Arrows was a cryptocurrency-friendly hedge fund that failed during the market collapse of 2022. As part of the proceedings, the advisory firm Teneo announced in February that it would sell 3AC’s digital collection, excluding the company’s “Starry Night Portfolio,” to realize the value of the NFTs.
Teneo stated that the Joint Liquidators of Three Arrows Capital had been diligently conducting an extensive process to identify and recover company assets. They selected Sotheby’s digital art team to sell their extensive NFT collection, citing their belief that the team’s superior approach would help maximize the value of these assets for all creditors involved.
The whereabouts of Davies and Zhu have been mainly unknown since the demise of 3AC. However, both co-founders have remained active on social media channels despite the fact that Davies risks being held in contempt of a United States bankruptcy court for neglecting to respond to a subpoena. In April, the duo supported the launch of the Open Exchange cryptocurrency project.
Sotheby’s established a specialized marketplace for digital artwork and NFTs, becoming one of the first major auction houses to do so amid the sale of several multimillion-dollar works. The platform featured several listings, including an NFT of the inaugural tweet from former Twitter CEO Jack Dorsey, the book’s original manuscript that coined the term “metaverse,” and numerous CryptoPunks.