In a shocking turn of events, major players like billionaire entrepreneur Mark Cuban and Yuga Labs, which made the Bored Ape Yacht Club, criticized the popular NFT trading platform OpenSea. OpenSea announced on Thursday that it would no longer enforce creator royalties, which caused a big fuss. Many people were upset and angry about this decision.
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Mark Cuban, who is well-known in the tech industry and the NFT space, went on Twitter to say that he strongly disagreed with what OpenSea did. He stressed how serious the situation was and said that not collecting and paying royalties on sales of NFTs would not only hurt trust in the platform but also hurt the whole industry. Cuban's words were important because of his status and experience in the crypto space. For example, he was an investor in OpenSea until the company's Series A funding round in 2021.
With this announcement, OpenSea changed the way it handles creator royalties. The platform said that as of August 31, buyers of NFTs that have already been sold wouldn't have to pay a creator fee. This change had a big effect on artists and teams that depend on passive income from reselling their work. Before, creator royalty fees of between 2.5% and 10% were an important part of the NFT ecosystem. They made sure that artists were still paid after their first sale.
Many people thought that the decision was made because of pressure from other NFT marketplaces that had cut or eliminated creator royalties to attract buyers. Devin Finzer, who is the CEO and co-founder of OpenSea, has said in the past that creator fees are important for protecting artists' rights.
Notably, Mark Cuban's criticism was especially interesting because he is a fan of NFTs and an investor in OpenSea. Even though Cuban was part of the platform's $23 million Series A funding round in 2021, those who thought that creator royalties were important to the integrity of the NFT ecosystem strongly agreed with him.
Yuga Labs, which made the Bored Ape Yacht Club NFTs, has joined the group of people who don't like what OpenSea did. In response to the policy change, Yuga Labs said it would stop being compatible with OpenSea over time. This answer focused on how OpenSea's choice affects the NFT creator community.
In a related event, a group of investors who bought Bored Ape Yacht Club NFTs started a lawsuit against Sotheby's Holdings Inc. and a number of celebrities, including Paris Hilton, Gwyneth Paltrow, Kevin Hart, and others. The lawsuit said that misleading advertising and lies about how much the NFTs were worth had led to false hopes of making money. The investors said that they bought the NFTs because they thought they would make money, but that didn't happen.
During the height of the NFT craze, the value of Bored Ape NFTs was in the six figures. However, they are now much cheaper on platforms like OpenSea. This case showed how complicated the NFT market is and how legal problems may come up as the market changes.
In short, OpenSea's decision to stop enforcing creator royalties made important people like Mark Cuban and NFT creators like Yuga Labs very angry. The controversy shed light on how complicated the NFT ecosystem is and brought attention to the problems and possible legal consequences of the NFT market.
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