Lawsuit Against Sotheby’s and Kevin McCoy Dismissed

A New York federal Judge has dismissed the Canadian corporation Free Holdings Inc.’s lawsuit claiming ownership of the digital artwork Quantum, the first known NFT created by Jennifer and Kevin McCoy and sold by Sotheby’s for $1.47 million.

While the NFT was minted on “Namecoin,” an early blockchain controlled by Free Holdings, the judge says McCoy later minted it on Ethereum, making them two different NFTs.

According to Ledger Insights, in order to maintain ownership of a digital item minted on the Namecoin blockchain, users must renew it every 250 days. However, after McCoy minted Quantum in 2014, he did not renew it, leading to a user named EarlyNFT to acquire the ownership rights. Court documents state that the user EarlyNFT was a “pseudonym for Free Holding’s sole member.”

Free Holdings argued that McCoy and Sotheby’s statements in the NFT auction’s promotional materials, calling it the “first NFT ever created,” harmed its chances of profiting from the $1,472,000 sale of Quantum. The company cited in its amended complaint that the materials did not distinguish the difference between “Ethereum-Quantum” and “NamecoinQuantum.”

Yet, the ruling determined that Free Holdings “failed to allege a proprietary interest in Quantum,” meaning the company was not able to provide enough evidence to support their claim that they had sole ownership of the Quantum sold by Sotheby’s even though they had the basis to support its ownership of the Namecoin NFT.

Ultimately, they were NFTs on two different blockchains and that drove the final decision. This case is a prime example demonstrating how blockchain technology can be used to confirm ownership of NFTs.

This story was breaking and has been updated.

The post Lawsuit Against Sotheby’s and Kevin McCoy Dismissed appeared first on nft now.

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