OpenSea disables Bored Ape NFT amid legal case in Singapore

OpenSea disables Bored Ape NFT amid legal case in Singapore

Due to an ongoing court dispute in Singapore, Asia, OpenSea, the world’s largest Non-Fungible Token (NFT) marketplace, has halted trading for a Bored Ape Yacht Club (BAYC) NFT on its platform.

On OpenSea, the world’s largest NFT marketplace, the item in question, BAYC #2162, has been tagged as “flagged for suspicious behaviour.” This marking makes it impossible for the present owner to sell the NFT. Prospective purchasers are also unable to make offers on the item.

According to a court filing and a statement from Singaporean legal firm Withers KhattarWong, an individual named Rajesh Rajkumar was able to obtain an injunction from the Singapore High Court halting the sale when a loan agreement with pseudonymous NFT collector chefpierre.eth soured.

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.

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