Featured image from Pexels, Charts from TradingView.com The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
A now former Bored Ape Yacht Club owner is entering uncharted territory this week and filing a lawsuit against leading NFT marketplace OpenSea. The move comes after the former Bored Ape owner was subject to an exploit on the platform that involved inactive listings, and led to hackers being able to ‘purchase’ the Ape for just 0.01 ETH.
Let’s look at what we know from early details of the lawsuit, and the precedent that could be set from this decision.
A Ballistic Bored Ape
A Texas resident has filed the lawsuit late last week, asking for over $1M worth of damages or the rightful return of his Bored Ape #3475. The man alleges that OpenSea was aware of the bug on the platform that resulted in the 0.01 ETH sale of the Ape, which was apparently not listed for sale by the owner at the time it was exploited.
The hacker was able to receive the Ape for 0.01 ETH, and quickly resold it for 99 ETH, or around $250K at today’s going prices. The Ape is arguably in the top 20% of rarity; many Bored Ape Yacht Club NFTs in this level of rarity are yielding north of $1M, giving the dollar amounts in this lawsuit some serious credibility.
The complaint states that “instead of shutting down its platform to address and rectify these security issues, Defendant continued to operate. Defendant risked the security of its users’ NFTs and digital vaults to continue collecting 2.5% of every transaction uninterrupted.”
This is the first time we’ve seen a lawsuit at this level against OpenSea or any NFT marketplace for that matter.
Related Reading | Denver Broncos: These Crypto Fans Rush To Secure $4 Billion To Own The NFL Team
Bored Ape Yacht Club operates on Ethereum, which has been trending largely with the broader crypto market lately. | Source: ETH-USD on TradingView.com
What Could Lead From Here?
Depending on how this case shakes out, there’s substantial opportunity for this lawsuit to set precedent of NFT lawsuits against marketplaces moving forward – and this will be a case for all emerging NFT marketplaces to keep a firm eye on. Bored Ape or otherwise, there are major NFT projects that have major dollar signs next to them, and many individuals are instilling notable trust in NFT marketplaces.
The individual raising the suit has argued that he has tried to sort out the issue with OpenSea directly, with no real traction or movement happening with the marketplace. This incident wasn’t the first time OpenSea has had hacking trouble, as we’ve covered a number of stories on the issue just this year alone. The platform has also been in a back-and-forth affair with Larva Labs on copycat project ‘CryptoPunks V1,’ which the marketplace has recently pulled, and all-in-all is leaving the OpenSea’s legal department plenty busy.
Where this latest case will go could have major impacts that span far beyond just these two parties involved. We’ll keep you up to date as the story develops.
Related Reading | Kevin O’Leary Reveals What Will Drive Bitcoin To $300,000