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, also in ETH*—outbidding a surprised Justin Sun, founder of the Tron blockchain, in the last minute.
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 a profit off of 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, an early 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 failed 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 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. 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 vanishing.
The site was originally registered to Ramesh Vinayagam—the name of a famous Indian composer, per Reddit user xclusive2. Another alias perhaps? 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. Fellow nocoiner David Gerard wrote a blog post explaining how NFTs work and why digital ownership of art is utter nonsense.
“NFTs are entirely for the benefit of the crypto grifters,” he said. “The only purpose the artists serve is as aspiring suckers to pump the concept of crypto — and, of course, to buy cryptocurrency to pay for ‘minting’ NFTs.”
Stepping back, we first 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 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 swapping ERC20 tokens—that’s the standard for fungible Ethereum tokens. WhaleStreet has its own native “yield-farming token” called Shrimp.
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 has been acquiring NFTs. It purchased Beeple’s “Everdays: 20 Collection” artworks for $2.2 million in December.
Metapurse has taken Beeple’s multiple artworks, or NFTs, along with three virtual museums, and combined everything into a “massive bundle.” Would you like to invest in this wonderful package? You can. All you have to do is stock up on Metapurse’s new B20 token.*
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
The name of this game is “number go up.” This is about pumping B20, so holders and Metapurse can benefit when they go to sell the token—i.e., 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 is to prevent any single person from owning more than half of B20 tokens—and snatching up all this wonderful artwork for themselves. The idea is to decentralize and democratize art, only Metakovan controls 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.
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 to actually sell them.
At the end of the day, this is a straight-up initial coin offering-style index fund to speculate on NFTs, with a twist: Metakovan owns most of the tokens—and he has an existing business relationship with the artist.
I wonder if Metakovan anticipated 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?
Also, in an earlier version of this post, I questioned why we can’t see the blockchain transaction—which was supposed to be 42,329.453 ETH. If we can’t see the transaction, how do we know that Beeple actually got paid for the sale and is not in cahoots with Metakovan to make number go up?
I now have a theory.
As Christie’s spells out in its conditions of sale, 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 even have gone into Christie’s escrow wallet.
Anyhow, if both parties had Coinbase accounts, the exchange could just change the database records off-chain to flip account balances. In this way, Coinbase acts like a second layer, and you wouldn’t see the ETH transaction.
When all was said and done, the Christie’s auction turned out to be a sweet deal for Beeple who now has a reason to shill crypto to his 2 million Instagram followers. And Metakovan gets publicity for his ICO project, so his own personal B20 holdings rise in value.
Since I published this article, Sundaresan has written to me and asked me to take it down. I refused, but agreed to make edits if he could point to anything specific that was wrong—so far, he hasn’t.
I’m posting Sundaresan’s 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.“
*Beeple’s “Everydays: The first 5000 days” is not part of the B.20 collection. Metakovan and Twobadour told the NYT, they have no plans to monetize the 5,000-image collage “yet.” The B20 collection is anchored by a different set of 20 Beeple artworks that Metapurse acquired in December for roughly $2.2 million on Nifty Gateway.
(March 14, 2021—This article has been updated to add comments from Sundaresan and more detail about Coins-e. Additional updates made later in the day to theorize on why the transaction did not show up on the blockchain, add some Gerard quotes and spruce of the ending a bit.)
(*March 15, 2021—Christie’s accepted its fees in ether—the native crypto of the Ethereum network. When Christie’s originally announced the sale, the auction house said it would accept crypto as payment, but the buyer’s premium had to be in real money. Later it changed its policy to accept ETH, according to Bloomberg.)
WTF is an NFT? Here’s a rundown on the basics
News: Metakovan unmasks himself, FATF goes after DeFi and NFTs, Coinbase pays CFTC $6.5M over wash trades
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18 thoughts on “Metakovan, the mystery Beeple art buyer, and his NFT/DeFi scheme”
Is Metakovan friends with Sun? Maybe theres a connection and this bidding war was fake, or pre ordaned.
I don’t know. I sent a few questions to Sun, but haven’t heard back.
Absolutely fascinating info! I smell a rat & it’s always the cover up that attracts attention. Excellent work Ms. Amy!
Thank you, Adrian
Amy, Great article.
Did you contact the law firm? Their website is here: https://www.lwlaw.com/contact-us/
I have strange feeling Justin Sun, Metakovan, and Christie’s are all partners-in-crime in regards to this scam, In the same way Sotheby’s partnered with Banksy to “self-destruct” his artwork during the auction. Note that 1 billion Tethers were minted on the TRON blockchain on March 10. Beeple’s artwork was sold on March 11. Justin Sun is founder of the TRON blockhain.
Could the “$69” figure be a symbolic sly-wink from all the crypto bros involved, to hide in plain sight that they are “blowing” each other/paying each other and in essence paying themselves with this scam?
wow! smoking gun here. amy, if you suddenly get loaded with bags of ether, just know i dun blame you *heehee* pump that coin!
Wow. This is great investigative journalism. Turned around really fast too given that all this is just recent news!
Thank you for bringing honesty to the world.
I can’t believe that Sun was able to bid the entire auction, then at the last minute the system went down and he lost out and Christie’s lost out on extra commission. It defies belief and he wouldn’t have taken it so lightly, in my opinion, had he actually “wanted” the purchase it. With the Internet, everything is traceable. Seems that Christies would have investigated this and issued a statement so future bidders, in other unrelated auctions, wouldn’t have any concern about their system & Sellers would be confident that they would be receiving the highest price. Nothing about the auction, most importantly, Christie’s lack of response, seems legitimate.
What a great read, I very much appreciate it. It’s even funnier now:
The whole things smells like a pump and dump. Something that crypto thrives on. Then again the Auction world is opaque even in conventional terms. I believe the same type of pump and dump was alive and well in the Auction world well before this event.
I agree the flaw with NFT’s is someone purporting to be the creator of a work simply creates a token of something they saved off the internet. As a digital Artist I have given this some thought. There is something called the Interplanetary File System) a very corny name. They claim to pin the original work to a network of cloud computers with a unique code where the work would exist in perpetuity. I have taken this step to protect my work.
Yea look at how MANY people are now trampling over the masses to create their own NFT’s because of this and in the process spending insane amounts of ETH, Ironically it seems the sites like Open Sea are just eating this all up as I see so MANY other artists & photographers rushing to mint what they have created. All without having a clue to the legal complexities of digital and print rights to their work, or being aware of how the gas fees are skyrocketing. I myself even looked into this myself getting caught up at first as I did not realize that the “Search” features are beyond broken on these NFT selling sites, meaning that all too often when they try to find the NFT’s they created even using an exact word search. They have to scroll through hundreds of other NFt’s which in no way at all match up with their word search before they can even find their art. Not to mention the insane gas fees in which I’ve seen people complaining how they could not even complete the sale of their nFT because they could not afford the gas fee to sell the item. Hell when I just checked over on Open Sea the gas fee to verify an account was essentially $116 us dollars worth of ETH ………..
Really surprised that your article has NOT been picked up by any of the large media outlets
Thanks for this very interesting article. Cryptocurrency is one thing, but the whole issue with B20 Tokens and FUDs just seems far too opaque and intangible, and also excessively complex. For the few in the know there are just too many opportunities to deceive the unwitting public (and each other) and I find that really quite concerning.
Thanks for this very interesting article. Cryptocurrency is one thing, but the whole issue with B20 Tokens and NFTs just seems far too opaque and intangible, and also excessively complex. For the few in the know there are just too many opportunities to deceive the unwitting public (and each other) and I find that really quite concerning.
Knew it seemed to good to be true. There had to be some sort of play behind “buying” some pixels for $69 million.
Interesting read!! been interested in understanding this new paradigm and this was a different perspective, appreciate the look into it