In a groundbreaking move, Sotheby’s, the renowned auction house, has announced the auction of a unique collection of non-fungible tokens (NFTs) previously owned by the now-defunct crypto hedge fund, Three Arrows Capital (3AC). This event marks a significant milestone in the world of digital art, as it brings to the fore the value and potential of NFTs in the mainstream art market.

The collection, known as the “Grails” collection, comprises some of the rarest and most influential works from notable NFT artists. The collection will be offered globally via live auctions, private sales, and other sales channels throughout 2023. The first auction, scheduled for May 19, will feature seven NFTs, including Zombie CryptoPunk #6649 from Larva Labs, Chromie Squiggle #1780 by Snowfro, Ringers #879 (or the “Golden Goose”) by Dmitri Cherniak, Fidenza #725 by Tyler Hobbs, and Autoglyphs.

The star of the show, “Fidenza #725,” a digital artwork featuring an array of graphic dashes and curves in subdued hues, fetched over $1 million. The asset, which is still currently under Sotheby’s control, had previously been receiving bids on NFT marketplace OpenSea for about 50 ether (ETH) — worth some $90,000, data shows.

3AC, a Singapore-based firm, was a prominent player in the crypto market, managing as much as $10 billion in March last year. However, the firm hit a brick wall following the collapse of the Terra ecosystem, to which it had significant exposure. After facing more than $400 million in liquidations in 2022 due to poor risk management, 3AC was eventually ordered into liquidation by a British Virgin Islands court in late June 2022.

The liquidation of 3AC’s assets, including its NFT collection, is being managed by advisory firm Teneo. The firm chose Sotheby’s for the NFT auction to “maximize the value of the assets.” This move underscores the growing recognition of NFTs as valuable digital assets.

This auction is not just a sale; it’s a testament to the resilience and potential of NFTs in the art world. As the digital art landscape continues to evolve, the auction of 3AC’s collection at Sotheby’s is a landmark event that underscores the growing acceptance and recognition of NFTs in the mainstream art market.