Sotheby’s is auctioning several NFTs from Three Arrows Capital

Several non-fungible tokens (NFTs) seized from the collection of collapsed crypto hedge fund Three Arrows Capital are coming up for auction, in what will mark the largest direct sale of digital art ever.

Nearly 40 works from the foundation’s GRAILS collection, including works by artists Dmitri Cherniak, Tyler Hobbs and Larva Labs, are estimated to sell for more than $5 million during the June 15 sale, Sotheby’s announced today (May 31).

“The GRAILS collection has long been renowned throughout the digital art world, distinguished by the depth of its holdings for many of the leading generative artists at the center of the movement,” said Michael Bouhanna, Sotheby’s head of digital art and NFTs, in a statement.

Sotheby’s sold seven works from the GRAILS collection in May for $2.5 million, all of the NFTs exceeding their high estimates. Hobbs’ Fidenza #725from the generative artist’s Fidenza series, sold for more than $1 million, while Autoglyph #187 raised more than $570,000.

The auction house also recently sold another group of GRAILS works for more than $3 million in a private sale that included a CryptoPunk NFT and pieces from Hobbs and Cherniak.

“Congratulations to the new owners! Great auction results” tweeted Su Zhuone of Three Arrows Capital’s co-founders, in response to Sotheby’s two previous sales.

The latest iteration of the fund’s NFT sale will include works by Kjeti Golid, a lesser-known Norway-based generative artist; Jeff Davis, who creates abstract pieces through algorithms; and Matt DesLauriers, a Canadian coder who integrates JavaScript into his NFTs.

Cherniak, Hobbs, Snowfro, Deafbeef and Hidekei Tsukamoto will also have pieces in the upcoming auction.

Sotheby’s will honor artist resale royalty prices from the auction, according to the auction house, which also said it plans to offer more works from the GRAILS collection for sale throughout the year.

Why are the fund’s assets auctioned off?

The liquidation of Three Arrows Capital, which filed for bankruptcy in July 2022, has been handled by advisory firm Teneo. In February, the firm issued a notice of its intention to sell Three Arrows Capital’s NFT collections.

“We chose to work with Sotheby’s digital art team on the sale of this expansive NFT collection because we believe they provide a best-in-class approach that will ultimately maximize the value of these assets on behalf of all creditors,” said Jack Coster, Teneo’s CEO, in a statement sent to the Observer.

Zhu and co-founder Kyle Davies have since opened a new cryptocurrency exchange. Open Exchange (OPNX) was launched in February and allows users to use bankruptcy claims as collateral.

Davies currently lives in Indonesia, which does not have an extradition treaty with the US, while Zhu’s whereabouts remain unknown.