OpenSea, the world’s largest Non-Fungible Token (NFT) marketplace, has disabled trading for a Bored Ape Yacht Club (BAYC) NFT on its platform amid an ongoing court case in Singapore, Asia.
The item in question, BAYC #2162, is now marked with a “reported for suspicious activity” tag on OpenSea, the world’s largest NFT marketplace. This tag prevents the current owner from being able to list the NFT for sale. Prospective buyers also cannot place offers for the item.
An individual called Rajesh Rajkumar was able to secure an injunction from the Singapore High Court blocking the sale after a loan agreement with pseudonymous NFT collector chefpierre.eth soured, according to a court filing and a statement from Singaporean law firm Withers KhattarWong.
What you should know
- According to the law firm, both parties entered into an NFT loan agreement on March 19 2022, with a subsequent refinancing deal a month later. This transaction was carried out on NFTfi, an NFT lending platform.
- Rajkumar used the BAYC NFT in question, the BAYC #2162, as collateral for the loan with both parties agreeing on an extension clause for the refinanced loan, according to the law firm’s statement.
- The plaintiff was unable to pay back the loan at the due date but still had the option to extend this date as previously agreed upon.
- According to Withers, chefpierre did not abide by the extension agreement but foreclosed on the loan. This action released the NFT from the platform’s escrow to chefpierre’s wallet.
- The BAYC floor price, the market value of the cheapest item in the collection, is currently at 96 ETH ($190,000), which in terms of value is down 55% in the month of May as the NFT market is currently in a bear phase.
A spokesperson for OpenSea told The Block, “While we don’t offer details about enforcement actions on individual collections, I can share that our platform policies and Terms of Service explicitly prohibit the use of OpenSea to buy, sell or transfer stolen items, fraudulently obtained items, items taken without authorization and/or any other illegally obtained items or launder money.”
There are also talks in the cryptocurrency community about how this kind of action by OpenSea goes against the decentralized nature of the industry, pointing out that the custodial ownership of NFTs should always remain with the user.