https://amycastor.com/2021/03/14/metakovan-the-mystery-beeple-art-buyer-and-his-nft-defi-scheme/ Primary Menu Amy Castor Independent Journalist * About Me * Selected Clips * Contact Me * Blog Subscribe to Blog via Email Enter your email address to subscribe to this blog and receive notifications of new posts by email. Join 10,581 other followers Email Address: [ ] Subscribe Twitter Updates * RT @fdestin: Oh wait.... maybe not the kind of history I was anticipating --> @ahcastor bombshell. amycastor.com/2021/03/14/ met... 1 hour ago * RT @brionv: NFT is a scam, a grift from top to bottom. At best it's terrible for the environment and provides no value, at worst it's a sca... 2 hours ago * RT @davidgerard: per the terms of sale, the coins had to come from Coinbase, Fidelity, Paxos or Gemini. Might have all happened entirely in... 2 hours ago * RT @AnimationItchy: New article: What's wrong with NFT? richardyot.com/blog/2021/3/14... On why artists should be very wary of the latest digital... 2 hours ago * RT @jfbasili: Fantastic journalism by @ahcastor. What's actually going on behind the Beeple / Metakovan NFT transaction. https:// t.co/4Tr3m... 2 hours ago Recent Comments [fe5fc] Cryptocritic on Metakovan, the mystery Beeple... [cd05b] Amy Castor on NYAG/Tether, Bitfinex settleme... [cd05b] Amy Castor on News: MicroStrategy needs more... [fe91c] David Baker on NYAG to crypto companies:... [fe91c] David Baker on News: MicroStrategy needs more... Skip to content Amy Castor Metakovan, the mystery Beeple art buyer, and his NFT/DeFi scheme Last week, a crypto whale going by the moniker "Metakovan" bought a Beeple artwork via Christie's auction for $69 million--$60 million in ETH and $9 million in fees--outbidding a surprised Justin Sun, founder of the Tron blockchain, in the last minute. 7/12 I tried to update my bid to $70 MIL at the last 30 secs yet my offer was somehow not accepted by Christie's system even though there was still 20 secs left. -- Justin Sun (@justinsuntron) March 12, 2021 After the barest amount of digging, I am going to hazard a guess that the mystery Beeple buyer is Vignesh Sundaresan, a crypto entrepreneur who has been in the crypto landscape for about seven years. It's pretty obvious, really. Metakovan has given a few audio interviews. And if you compare those to previous Sundaresan interviews, like this one, it's the same voice--and the same crypto origin story. In a recent interview with the Good Time Show, for instance, Metakovan says he got into crypto in 2013, lived in Canada for several years, and then left for Singapore in 2017 because crypto regulations in North America were too "unclear." That's basically Sundaresan's background as well. Putting aside the matter of why Sundaresan would want to keep his real identity cloaked in the first place, the next question is the grift--how is he spinning money off non-fungible tokens, or NFTs? I'll get to that in a moment, but first... Who is Sundaresan? According to the bio on his website, Vignesh Sundaresan is behind several crypto startups. He co-founded BitAccess, a bitcoin ATM company in Canada. BitAccess was accepted into the Y Combinator startup accelerator in June 2014, according to Coindesk. And then, in January 2017, he founded the Singapore-based Lendroid Foundation. The firm raised $47.5 million (50,000 ETH) in a two-day initial coin offering in February 2018, according to CryptoRank. He also founded consulting firm Portkey Technologies and claims to have backed several popular crypto projects, including Ethereum, Polkadot, Dfinity, Omisego and Decentraland. Going back further, Sundaresan launched crypto exchange Coins-e in Ontario in 2013. (Coincidentally, the same year that Gerald Cotten and Michael Patryn launched their Canadian crypto exchange QuadrigaCX.) Coins-e, a defunct Canadian exchange Several Coins-e users have taken to social media to complain about losing money on Coins-e, calling it a scam and warning others to watch out. See Reddit--here and here--and BitcoinTalk. The posts on r/dogecoin are the most alarming. Coins-e clients report having had their dogecoin disappear. Wireguysny described watching 1.3 million DOGE evaporate and the frustration of being unable to reach tech support to get to the bottom of the matter. Xclusive2 wrote: "I've had just about enough of of Coins-e millions of coins missing, no reply from support ever! the reason is because it's a one man operation. the problem is this joker is stealing and trading everyone's coins when and how he feels to make himself rich he knows that Doge is worth a lot of BTC in large volumes." Sundaresan denies being the guy who allegedly ripped people off. According to him, Coins-e was sold to a company called Casa Crypto in Waterloo. The transfer was overseen by law firm LaBarge Weinstein, he claims. "Since it was sold, I have not been associated with Coins-E. Allegations of a scam are FUD," he told me. I am so far unable to confirm that sale. I can't find any announcement or press release on the sale. The Coins-e website no longer exists, and an archive of the site's "About" page from 2016 doesn't reveal who is behind the operation. I can't find a company called "Casa Crypto" in Waterloo either. Sundaresan offered to show me proof of the sale via a video call. I told him I was open to that, but he hasn't gotten back to me to set up a time--and referred me instead to his comms person. He did not comment on whether he was Metakovan. Meanwhile, I've looked up the domain registration for Coins-e.com. The site was registered in May 2013 and the only update was in May 2020--after customers complained about their coins disappearing. The site was originally registered to Ramesh Vinayagam--the name of a famous Indian composer, per Reddit user xclusive2--so perhaps another alias? And, according to a Paste from January 2014, the site was registered to the man himself shortly before the registration was made private and Sundaresan entered the Y Combinator program. The NFT connection NFTs are the big thing now. They took over as the latest grift when decentralized finance, or DeFi, ran out of steam last year. My fellow nocoiner David Gerard wrote a blog post explaining what NFTs are, and why digital ownership of art is utter nonsense. Stepping back, we first start to see the connection between Sundaresan's startup Lendroid and NFTs in a blog post titled "Why DeFi Needs NFTs." The post, written by his business partner Anand Venkateswaran, describes how NFTs magically solve the problems of DeFi, such as flash crashes, volatility, and governance. (Venkateswaran, a comms person, also has a pseudonym--he goes by Twobadour Pannar.) Lendroid powers WhaleStreet, an Ethereum-based platform for token swaps. You would use it, if you wanted to trade ETH for another ERC-20 token. WhaleStreet has its own native "yield-farming token" called Shrimp, which you need to acquire before you can purchase other DeFi tokens on the platform. Metakovan is also behind Singapore-based Metapurse, a crypto-based investment firm. Metapurse's mission, according to its website, is to "democratize access and ownership to artwork." The firm is hard at work acquiring NFTs. It purchased Beeple's "Everdays: 20 Collection" artworks for $2.2 million in December. Metapurse has taken these Beeple artworks, or NFTs, along with a few virtual museums, and combined everything into a "massive bundle." Would you like to invest in this wonderful package? You can in the form of B20 tokens. This blog post on the Metapurse substack lays out the grand plan: "We believe we truly achieved this with B.20 - the name of a massive NFT bundle we are fractionalizing so that everyone can have ownership over the first large scale public art project within the metaverse. It is important to note that we're fractionalizing ownership, not the assets themselves. These fractions will be available as 10 million B.20 tokens, and can be referred to as the "keys" to this digital vault." Number go up At the end of the day, it's all about "number go up." The B20 token is pumped up in value, so holders and Metapurse can benefit when they go to sell the token--get more ETH, buy more NFTs, rinse, repeat. The token distribution is something to pay attention to. Metakovan has 59% of all the B20 tokens. Why does he own the majority of tokens? As he explains it, that's to prevent any one person from owning the majority of B20 tokens--and snatch up all this wonderful artwork for themselves. The idea is to democratize art, if you can get your head past Metakovan controlling the token supply. What's interesting is that Beeple, the creator of the artwork, is actually a business partner of Metakovan's. He owns 2% of all the B20 tokens. I'm sure there is no conflict of interest here. [screen-sho] WhaleStreet hosted the B20 sale on Jan. 23. Apparently, 1.6 million B20 tokens were sold to the public for $0.36 per token. After the Christie's auction, B20 shot up to $23. It's now down to around $16, according to Coinmarketcap. That's a nice profit for anyone who got in early--and worth over $3 million for Beeple, if he dumps his coins quickly and there's enough liquidity. It was a privilege to engineer the largest bundle ever, and to also host the #B20 sale portal. We've made it bright and shiny. Come check in at 6:30 pm CST at https://t.co/UO5YO6l628 https:// t.co/wvA6vQraam -- WhaleStreet (@WhaleStreetoffl) January 23, 2021 I'm wondering--did Metakovan anticipate having to pay this much ETH to Beeple for his "Everydays: The First 5000 Days"? Metakovan knew he needed the artwork for his index fund. But did he expect Sun to keep bidding the price up to the very last second? At the end of the day, this is a straight-up ICO-style index fund to speculate on NFTs, with a twist: Metakovan holds the majority of the tokens--and he has an existing business relationship with the artist. In an earlier version of this blog post, I wondered why we can't see the transaction--which was supposed to be 42,329.453 ETH--on the blockchain. I now have a theory as to why. As Christie's lays out in its conditions of sale document, the transaction needs to come directly from a digital wallet maintained with Coinbase Custody Trust, Coinbase, Fidelity Digital Assets Services, Gemini Trust Company or Paxos Trust Company. And it sounds like the funds may have gone into Christie's escrow wallet. In any case, say, if both parties were using Coinbase accounts, the exchange could just change the database records off-chain to flip account balances, and it wouldn't show up on the blockchain. The other situation I pondered was: imagine if you were to artificially inflate the price of your NFT index fund by pretending to pay an artist for their art. And then you never actually paid the artist--who was your business partner--but the token inherited the fake value. Since Beeple has to pay taxes on the gains, I'm not sure this scenario would play out in his favor, so nix that theory. --------------------------------------------------------------------- Since I published this article, Sundaresan has written to me and asked me to take it down. I refused, but agreed to fix anything if he could point to anything specific that was wrong. I'm posting Sundaresan full comment on the matter below: Hello Amy, I am replying to address your concern about coins-e as relating to me. Definitely there are several factual inaccuracies in your blog post and your tweets. I would appreciate if you would temporarily pull down the posts until you have the facts right, as such a post causes unnecessary FUD and obviously it is your choice to not take it down. But if you do it will show that your intentions are in the right place and that you are looking to have a conversation. Regarding coins-e, it dates back to days when the crypto industry was very unorganized and the service itself was quite small and did not warrant a press release when the sale was done. The service was not even big enough to attract the crypto media attention, the service started growing bigger as the Casa crypto was taking over. The transfer happened through a well documented process with assistance from lawyers on both sides. Post the sale I had moved on to build Bitaccess, backed by YCombinator and I have had no link to Casa Crypto after the sale and I have repeatedly addressed this issue via newsletters and Q&As. For the other parts of your question, I believe it shall be better answered by contacting @metapurse and @twobadour directly. --------- This article has been updated to add comments from Sundaresan and more detail about Coins-e. Additional updates made to theorize on why the transaction did not show up on the blockchain. If you enjoy my work, please support me by subscribing to my Patreon. Share this: * Twitter * Facebook * LinkedIn * Like this: Like Loading... BeepleEverdays: 20 CollectionEverydays: The First 5000 DaysMetaKovan Mike WinkelmannVignesh SundaresanWhaleStreet Posted on March 14, 2021March 14, 2021 by Amy Castor in Blogging 1 Post navigation Previous postNYAG to crypto companies: 'Play by the rules or we will shut you down' One thought on "Metakovan, the mystery Beeple art buyer, and his NFT/ DeFi scheme" 1. [fe5fcd93] Cryptocritic says: March 14, 2021 at 8:42 am Is Metakovan friends with Sun? Maybe theres a connection and this bidding war was fake, or pre ordaned. Reply Leave a Reply Cancel reply Enter your comment here... [ ] Fill in your details below or click an icon to log in: * * * * Gravatar Email (Address never made public) [ ] Name [ ] Website [ ] WordPress.com Logo You are commenting using your WordPress.com account. ( Log Out / Change ) Google photo You are commenting using your Google account. ( Log Out / Change ) Twitter picture You are commenting using your Twitter account. ( Log Out / Change ) Facebook photo You are commenting using your Facebook account. ( Log Out / Change ) Cancel Connecting to %s [ ] Notify me of new comments via email. [ ] Notify me of new posts via email. [Post Comment] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] Create a website or blog at WordPress.com Add your thoughts here... (optional) [ ] Post to [] Cancel [Reblog Post] [ ] Email [ ] Name [ ] Website [ ] [Post Comment] Loading Comments... Comment x %d bloggers like this: [b]