NFT Artwork Seized From Three Arrows Capital Fetches $10.9 Million In Sotheby's Auction

Recent information disclosed by Sotheby's auction house reveals that the digital collectibles owned by Three Arrows Capital (3AC) were sold for a total of $10.9 million in a New York auction held on June 15.In the aftermath of Luna and TerraUSD cryptocurrencies collapsing, 3AC was the first major crypto firm to file for bankruptcy in 2022.Before filing for Chapter 11 bankruptcy, Three Arrows Capital had acquired a collection of non-fungible tokens (NFTs). NFTs are unique digital collectibles that are connected to virtual or physical content. They serve as evidence of ownership for various items such as images, videos, artwork, or text fragments.According to Christopher Farmer, a senior managing director at consultancy Teneo, it was announced in February that certain NFTs previously held by the bankrupt Singaporean crypto hedge fund Three Arrows Capital (3AC) would be made available for sale.This was part of efforts to retrieve funds for its creditors.Plans for the auction were revealed in April through a press release:Sotheby's is preparing to host an auction for a collection of non-fungible tokens (NFTs) seized from now-defunct crypto hedge fund Three Arrows Capital.Based on data from blockchain tracker DappRadar, the hedge fund had spent $15.5 million worth of crypto to acquire the 37 NFTs in several rounds of purchases between July and August 2021.Among the collection of artworks by Canadian artist Dimitri Cherniak, one of the most valuable non-fungible tokens (NFTs) owned by the hedge fund was "The Goose." It was featured as Ringer #879 in a series of 1,000 computer-generated abstract images.Reportedly, Ringer #879 sold for $6.2 million, which according to DappRadar data, is $0.3 million higher than what 3AC had spent acquiring it in August 2021.Notably, another seven of 3AC-owned NFTs had already sold in May, roughly one month before the Ringer #879 sale. These seven fetched a staggering $2.5 million at the Sotheby's auction.According to Michael Bouhanna, head of digital art and NFTs at Sotheby, the margin indicated a growing interest in NFTs. In his words:We see a growing interest and more non-crypto, non-NFT collectors starting to really understand the quality and why it's interesting.Bouhanna explained the existence of the NFTs at the auction, saying that while they only existed in digital form, freely available for public viewing online, physical print copies accompanied most of the items. Buyers could display these physical copies.It is worth mentioning that crypto prices surged in 2021 in tandem with the NFT boom. This caused a surge in crypto prices as technology enthusiasts wagered on digital assets becoming lucrative across online virtual marketplaces.However, the intense speculative craze surrounding NFTs has diminished significantly, with sales declining from a peak of approximately $5.7 billion in January 2022 to around $675 million in May 2023.Apart from the waning hype, the decline in NFT sales can also be attributed to a general sense of Fear, Uncertainty, and Doubt (FUD) prevalent in the market. This atmosphere of uncertainty has made market participants more cautious and risk-averse.