Judge Dismisses Lawsuit Over Ownership of $1.47 Million NFT


A federal court last Friday dismissed a lawsuit that questioned the ownership rules around an NFT called “Quantum,” which Sotheby’s sold for $1.47 million in 2021 as the first of its kind. The legal battle had become part of a larger effort to define rules of ownership for digital artworks.

A Canadian company named Free Holdings brought the complaint last year against the auction house and the artist, Kevin McCoy, who created the artwork in 2014 as a demonstration of the blockchain’s potential to register artworks on a digital ledger system. The artwork itself looks like something from a science-fiction movie, as if it were an alien wormhole pulsing with neon colors.

The dispute arose because the blockchain system that McCoy used for “Quantum” also required him to periodically renew his ownership rights. (Most web domains operate by similar rules.) But the artist neglected to renew terms of ownership, which allowed Free Holdings to purchase the registration and assert ownership over the work itself. The company subsequently accused Sotheby’s and McCoy of slander and…

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