OpenSea, the online NFT marketplace, has shut down trading of a certain Bored Ape amidst an ongoing ownership dispute case in Singapore. The NFT now sports a bright red disclaimer announcing that is has been “reported for suspicious activity.”
The plaintiff in the court case, Janesh Rajkumar, apparently used Bored Ape 2162 as collateral for a loan to borrow crypto, according to Bloomberg. Rajkumar sought an injunction, according to a court filing with Singapore Courts, and in a first of its kind case, the court ruled that NFTs qualify as a digital asset that could be protected.
“It is the first decision in a commercial dispute where NFTs are recognised as valuable property worth protecting,” said Shaun Leong as cited in Bloomberg. Leong is the lead counsel for the case and an equity partner of Withersworldwide. “[T]he implication is that NFT is a digital asset and people who invest in it have rights that can be protected.”
The defendant is the anonymous chefpierre. According to The Art Newspaper, Rajkumar and chefpierre entered a loan agreement in March using the wesbite NFTfi, which allows NFT owners to “use the assets they own to access the liquidity they need,” per their website. Rajkumar would hold Bored Ape 2162 on NFTfi as collateral for the loan while it was repaid.
A part of this agreement was that Rajkumar wouldn’t lose ownership of 2162, and if he couldn’t pay his debt to chefpierre in time, he would receive an extension. When Rajkumar realised he needed more time to repay the loan, chefpierre allegedly foreclosed, and moved 2162 to his personal Ethereum wallet, where it ended up on for sale OpenSea. Now, it’s on ice.
Bored Apes were once an inescapable symbol of the NFT revolution, worth millions of dollars. But the NFT craze has definitely died down recently, as Fortune reports that the average price of an NFT fell nearly $US5,000 ($6,941) from January to March of this year, referring to market tracker NonFungible. While NFTs might be dipping in popularity and value, this court case, however, might do NFTs some favours by legitmising them as a bona fide financial asset.