By Natalie Grumhaus
In 2014, Kevin McCoy and Anil Dash created what is widely considered to be the world’s first non-fungible token (NFT), titled Quantum (2014). Recently, however, McCoy’s ownership of Quantum has been called into question. In Free Holdings v. McCoy and Sotheby’s, the NFT ownership dispute was brought as a case of first impression. The court held that the original creator, Kevin McCoy, did retain all ownership rights because plaintiff neither alleged an injury sufficient for standing nor made a claim for which relief could be granted.
Free Holdings, the plaintiff, was an anonymous Canadian holding company that took advantage of an ownership loophole in minting NFTs and coined a replica of McCoy’s Quantum, in the same space that had been previously occupied by McCoy’s original NFT. The original had been transferred to a different blockchain by McCoy, shortly before it was sold at auction by Sotheby’s to Alex Amsel for $1.47 million in an online auction called Natively Digital: A Curated NFT Sale.[1] Following the Sotheby's sale in 2021, Free Holdings brought this suit against McCoy, Sotheby’s, and Amsel, attempting to invalidate the sale and potentially cash in on some of the fame that Quantum garnered.
Facts of the Case
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