Nifty Gateway vs. Amir Soleymani. A landmark lawsuit in the NFT scene is currently raging on. Art Collector Amir Soleymani is suing curated digital platform Nifty Gateway over the sale of one of Beeple’s digital art, Abundance.
Context: Amir Soleymani’s Lawsuit against Nifty Gateway
It all started when the hammer went down, marking the sale of the first edition of Beeple’s piece to Ethereum‘s co-founder Taylor Gerring (username tgerring) for $1.2 Million. Soleymani lost out because he was only the second-highest bidder.
Naturally, the Collecter was disappointed for missing out on a chance to own the digital art created by the record-smashing digital artist. He was then “shocked” to learn that the remaining top 99 bidders would be expected to pay for another edition of the work. This is allocated to them in order of their place in the closing bids since the platform implemented a ranked auction.
Given this, Nifty Gateway asked Soleymani to pay $650,000 for the second edition of the work. This is where the trouble in NFT paradise begins.
Amir Soleymani’s Side
The short story is that Solemani refused to pay the amount that the platform is demanding. Airing out his feelings, he said, “Imagine bidding to win an item, ending up in second place and getting almost the same thing the third bidder gets but with a significant difference in bid amount!”
He explained that “this method of auction maximizes revenue for the platform and artists but is damaging to collectors.”
Nifty gateway stood its ground the froze Soleymani’s account and blocked him from accessing his portfolio of over 100 NFTs. In retaliation, Soleymani has instigated legal proceedings in both the UK and US, where the major NFT platform owned by Cameron and Tyler Winklevoss is based.
The UK lawsuit of Soleymani is arguing to the High Court the terms of the action. Allegedly, Nifty Gateway changed the sale terms which Soleymani signed up to in February. Then, the second argument attacks how the platform clearly communicated the terms of the sale. According to Soleymani, the platform failed to inform bidders of the true nature or reality of the ranked auction to the bidders.
Nifty Gateway’s Side
As of press time, the platform and the controversial owners have not released a statement. However, the records show that the Nifty Gateway has filed legal proceedings in New York this July. Specifically, they are seeking arbitration to resolve the payment of the outstanding amount.
Naturally, the legal and art scene is filling up the gaps. An associate at Canvas Art Law, Jon Sharples commented that the spotlight would be on how much power decentralized platforms wields. So the High Court will scrutinize Nifty Gateway’s action in freezing the claimant’s account.
The most sensitive component is how Nifty’s action prevented Soleymani from accessing his NFTs worth millions. The market moves quickly. Hence, the agility to act by trading or selling your NFT can mean gains and losses in Millions.
How will the lawsuit affect the NFT Industry?
Despite mainstream publicity and commercial success of NFT projects, the industry is still in its inception stage. Part of the birth pains is the gray areas in terms of the legal aspect. Particularly, the contractual structures like smart contracts and copyrights. Who can forget how Jay-Z sued former partner Damon Dash. Simply put, Jay-Z wanted to stop the auction of his first album “Reasonable Doubt.”
The main question now is if Amir Soleymani is liable for the outstanding amount. We’ll follow this story closely!