Art

He just spent $69 million on a digital piece of art. It’s not his first Beeple. – The Washington Post

Published

3 years ago

March 17, 2021

Last week, a mysterious buyer paid $69.3 million for a digital collage, an auction heralded as a historic moment for the art world and the third-highest price ever paid for a work by a living artist.

The buyer, a cryptocurrency entrepreneur who uses the pseudonym MetaKovan, may have benefited financially from the sale. Months before Christie’s auction house put the piece up for auction, MetaKovan had bought other works by the artist, divided ownership of them into blockchain-based “tokens” and sold those to the public, according to a blog post from MetaKovan’s crypto investment fund.

As bids for the new work kept rising, so did the value of those tokens. By March 11, the day MetaKovan won the Christie’s auction, the value of his shares in the art tokens had risen by about $51 million, according to historical prices on crypto data site CoinMarketCap and a description of his financial stake on his investment fund’s website.

The auctioned artwork, a collection of hundreds of smaller works by the South Carolina artist Beeple, was sold as a non-fungible token, or NFT, which uses the same technology behind cryptocurrencies such as bitcoin to create a certificate of ownership over a specific digital file that can’t be copied or forged. Christie’s called the sale a “milestone for digital art collecting,” and many marked the sale as a key moment for blockchain technology’s move into the mainstream.

Legal experts say it’s not apparent that MetaKoven did anything wrong. It’s not against the law for someone to buy, resell and promote the value of digital assets as long as they do not plan to dump their stake for quick financial gain, said Carol Goforth, a professor of law at the University of Arkansas at Fayetteville who specializes in cryptocurrency regulation.

But the financial interests of the auction’s winning bidder show that the recent frenzy around digital art may be less a sign of an artistic revolution than a gold rush into highly speculative blockchain technology.

“It could be argued that it’s a cash grab,” said Paul Sibenik, an investigator at CipherBlade, a firm that specializes in blockchain and cryptocurrency fraud. He sees no evidence of potential fraud. “If you found value in having the asset itself, maybe you wouldn’t try to sell it in pieces to everyone who wanted a portion of it,” Sibenik said.

A spokeswoman for MetaKovan declined to comment. In blog posts and podcast interviews, the entrepreneur has said he intends to hold his stakes in Beeple artwork for the long term.

MetaKovan says he purchased 20 artworks by Beeple for $2.2 million in December and decided to make shares of the collection available to the public through a digital token, similar to a share in a company. He created 10 million tokens, called B.20, making around 25 percent of them available to the public and keeping about 50 percent for himself, according to a description of how the token would work from MetaKovan’s investment fund.

The remainder he set aside for “friends,” “prospective partners” and Beeple, according to the fund. “It was important for us that the artist was taken care of beyond the sale proceeds, so Beeple gets an allocation of 2%.”

Before becoming the third-most-valuable living artist, Beeple, whose real name is Mike Winkelmann, was best known for his irreverent and grotesque pictures of political and cultural figures like Mickey Mouse or former president Donald Trump. Most of his work appears on Instagram, where he has nearly 2 million followers. He has also helped design concert visuals for musicians including Ariana Grande and Nicki Minaj.

Winkelmann declined to comment.

Winkelmann is savvy when it comes to NFTs. Besides the collection bought by MetaKovan in December, the artist has also sold some of his artwork for $1 a piece on NFT-trading sites, setting off mad scrambles that generate more hype and headlines.

The B.20 tokens based on Beeple’s work are about 41 times more valuable today than they were in January, when MetaKovan first made them available, according to CoinMarketCap. From the day the Christie’s auction began, on Feb. 25, to the close of the auction on March 11, the price of one B.20 token grew from $2.17 to $18.57.

The value of MetaKovan’s stake in B.20 ― about 5 million tokens, according to his blog post — grew by about $51 million over that period. Beeple’s personal stake in B.20 grew by about $2 million.

A spokesperson for Christie’s did not return requests for comment.

Although shared ownership of artworks may reduce the social prestige that comes with a private art collection, it has the benefit of being more tradable, said Will Cong, an associate professor of finance at Cornell University. “Think about how traditional art pieces are hard to trade,” he said. “That is solved after the ownership can be easily divided and traded.”

The investors who jumped into B.20 and helped push up the price include cryptocurrency enthusiasts, traditional art collectors and some novice investors who became interested in digital art only in recent weeks. In interviews with The Washington Post, several people who purchased B.20 tokens said they believed they were getting in on the ground floor of a new type of business built around digital art.

“I invested because I want to make money, but I also want to be a part of the future of modern art,” said Cole Tobias, who purchased $783 worth of B.20 tokens in the past week.

Tobias, a 24-year-old accountant in New York, said he began buying and trading video highlights of basketball stars on the digital auction site NBA Top Shots earlier this year. He became interested in digital art, and he liked the fact that fractional ownership could allow him to purchase a share in art that he could otherwise not afford.

As the auction heated up, more people bought B.20 to get a piece of the action.

A Berlin-based translator who goes by the screen name Nerz said he invested in B.20 partly because he believed the Christie’s auction would confer value on other Beeple artworks.

“B.20 sounded fascinating because of the upcoming Christie’s auction and it sounded like a short term speculation worth a try,” he said to The Post in a private message on Discord. “So I made my decision as a speculation mainly out of financial interest.”

As the end of the auction approached, the bid prices for the Beeple piece increased rapidly. MetaKovan was locked in a bidding war with others who wanted the artwork. One of them, cryptocurrency entrepreneur Justin Sun, said he tried to increase his bid in the final 30 seconds of the auction, but the website froze and wouldn’t let him. He says he doesn’t know MetaKovan personally and doesn’t own any B.20.

“This is basically a new era of art, participating in this auction is kind of making history,” Sun said in an interview.

Nerz, the investor who bought some B.20 because of the excitement around the Christie’s auction, said he thinks the token is still undervalued.

“Right now I think each of the 20 pieces is valued around 7-8 million calculated by the token prize? That seems low,” he said. “It’s a game of optics and narrative and it’s all about what is possible to believe.”

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Art

Calvin Lucyshyn: Vancouver Island Art Dealer Faces Fraud Charges After Police Seize Millions in Artwork

Published

11 hours ago

September 13, 2024

Harry Miller

In a case that has sent shockwaves through the Vancouver Island art community, a local art dealer has been charged with one count of fraud over $5,000. Calvin Lucyshyn, the former operator of the now-closed Winchester Galleries in Oak Bay, faces the charge after police seized hundreds of artworks, valued in the tens of millions of dollars, from various storage sites in the Greater Victoria area.

Alleged Fraud Scheme

Police allege that Lucyshyn had been taking valuable art from members of the public under the guise of appraising or consigning the pieces for sale, only to cut off all communication with the owners. This investigation began in April 2022, when police received a complaint from an individual who had provided four paintings to Lucyshyn, including three works by renowned British Columbia artist Emily Carr, and had not received any updates on their sale.

Further investigation by the Saanich Police Department revealed that this was not an isolated incident. Detectives found other alleged victims who had similar experiences with Winchester Galleries, leading police to execute search warrants at three separate storage locations across Greater Victoria.

Massive Seizure of Artworks

In what has become one of the largest art fraud investigations in recent Canadian history, authorities seized approximately 1,100 pieces of art, including more than 600 pieces from a storage site in Saanich, over 300 in Langford, and more than 100 in Oak Bay. Some of the more valuable pieces, according to police, were estimated to be worth $85,000 each.

Lucyshyn was arrested on April 21, 2022, but was later released from custody. In May 2024, a fraud charge was formally laid against him.

Artwork Returned, but Some Remain Unclaimed

In a statement released on Monday, the Saanich Police Department confirmed that 1,050 of the seized artworks have been returned to their rightful owners. However, several pieces remain unclaimed, and police continue their efforts to track down the owners of these works.

Court Proceedings Ongoing

The criminal charge against Lucyshyn has not yet been tested in court, and he has publicly stated his intention to defend himself against any pending allegations. His next court appearance is scheduled for September 10, 2024.

Impact on the Local Art Community

The news of Lucyshyn’s alleged fraud has deeply affected Vancouver Island’s art community, particularly collectors, galleries, and artists who may have been impacted by the gallery’s operations. With high-value pieces from artists like Emily Carr involved, the case underscores the vulnerabilities that can exist in art transactions.

For many art collectors, the investigation has raised concerns about the potential for fraud in the art world, particularly when it comes to dealing with private galleries and dealers. The seizure of such a vast collection of artworks has also led to questions about the management and oversight of valuable art pieces, as well as the importance of transparency and trust in the industry.

As the case continues to unfold in court, it will likely serve as a cautionary tale for collectors and galleries alike, highlighting the need for due diligence in the sale and appraisal of high-value artworks.

While much of the seized artwork has been returned, the full scale of the alleged fraud is still being unraveled. Lucyshyn’s upcoming court appearances will be closely watched, not only by the legal community but also by the wider art world, as it navigates the fallout from one of Canada’s most significant art fraud cases in recent memory.

Art collectors and individuals who believe they may have been affected by this case are encouraged to contact the Saanich Police Department to inquire about any unclaimed pieces. Additionally, the case serves as a reminder for anyone involved in high-value art transactions to work with reputable dealers and to keep thorough documentation of all transactions.

As with any investment, whether in art or other ventures, it is crucial to be cautious and informed. Art fraud can devastate personal collections and finances, but by taking steps to verify authenticity, provenance, and the reputation of dealers, collectors can help safeguard their valuable pieces.

Art

Ukrainian sells art in Essex while stuck in a warzone – BBC.com

Published

2 weeks ago

September 2, 2024

Harry Miller

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Ukrainian sells art in Essex while stuck in a warzone BBC.com

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Art

Somerset House Fire: Courtauld Gallery Reopens, Rest of Landmark Closed

Published

4 weeks ago

August 18, 2024

Harry Miller

The Courtauld Gallery at Somerset House has reopened its doors to the public after a fire swept through the historic building in central London. While the gallery has resumed operations, the rest of the iconic site remains closed “until further notice.”

On Saturday, approximately 125 firefighters were called to the scene to battle the blaze, which sent smoke billowing across the city. Fortunately, the fire occurred in a part of the building not housing valuable artworks, and no injuries were reported. Authorities are still investigating the cause of the fire.

Despite the disruption, art lovers queued outside the gallery before it reopened at 10:00 BST on Sunday. One visitor expressed his relief, saying, “I was sad to see the fire, but I’m relieved the art is safe.”

The Clark family, visiting London from Washington state, USA, had a unique perspective on the incident. While sightseeing on the London Eye, they watched as firefighters tackled the flames. Paul Clark, accompanied by his wife Jiorgia and their four children, shared their concern for the safety of the artwork inside Somerset House. “It was sad to see,” Mr. Clark told the BBC. As a fan of Vincent Van Gogh, he was particularly relieved to learn that the painter’s famous Self-Portrait with Bandaged Ear had not been affected by the fire.

Blaze in the West Wing

The fire broke out around midday on Saturday in the west wing of Somerset House, a section of the building primarily used for offices and storage. Jonathan Reekie, director of Somerset House Trust, assured the public that “no valuable artefacts or artworks” were located in that part of the building. By Sunday, fire engines were still stationed outside as investigations into the fire’s origin continued.

About Somerset House

Located on the Strand in central London, Somerset House is a prominent arts venue with a rich history dating back to the Georgian era. Built on the site of a former Tudor palace, the complex is known for its iconic courtyard and is home to the Courtauld Gallery. The gallery houses a prestigious collection from the Samuel Courtauld Trust, showcasing masterpieces from the Middle Ages to the 20th century. Among the notable works are pieces by impressionist legends such as Edouard Manet, Claude Monet, Paul Cézanne, and Vincent Van Gogh.

Somerset House regularly hosts cultural exhibitions and public events, including its popular winter ice skating sessions in the courtyard. However, for now, the venue remains partially closed as authorities ensure the safety of the site following the fire.

Art lovers and the Somerset House community can take solace in knowing that the invaluable collection remains unharmed, and the Courtauld Gallery continues to welcome visitors, offering a reprieve amid the disruption.

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