Crypto collective loses bid for rare copy of US Constitution to hedge fund mogul
ConstitutionDAO raised more than $40 million in less than a week for the auction. But a hedge fund CEO had more.
A group raised $40 million in crypto but wasn't able to buy a copy of America's founding document.
A hastily formed group of cryptocurrency enthusiasts came close to buying a first edition copy of the US Constitution but fell short of securing the document, which was purchased by a hedge fund CEO for $43.2 million.
The nail-biter of an auction, the last Sotheby's conducted on Thursday evening, started at $30 million and quickly rose in turns between crypto group ConstitutionDAO and another bidder, who was later identified as hedge fund billionaire Ken Griffin. It wasn't immediately clear who won the auction, which was conducted by phone, and the cryptocurrency group initially claimed victory in a Twitter Space audio chat.
That excitement dissolved, however, when the group discovered it hadn't prevailed because it didn't have enough in reserve to care for the document on an on-going basis.
"While this wasn't the outcome we hoped for, we still made history tonight with ConstitutionDAO," the group said in a statement that was tweeted after the auction. "We are so incredibly grateful to have done this together with you all and are still in shock that we even got this far."
The following day, Sotheby's confirmed that Griffin, the founder and CEO of Citadel, had won the bid. Griffin plans to loan the document to the Crystal Bridges Museum of American Art in Bentonville, Arkansas.
Though it didn't win, ConstitutionDAO's effort was a high-profile example of cryptocurrency crowdfunding. The group came together in less than a week, leaving unanswered questions such as where it would display the document or who would own it. Known as a decentralized autonomous organization, the DAO managed member contributions through automated codesets that run on a blockchain, a distributed record of transactions.
What initially seemed like financial performance art, complete with its own insider memes and hashtags, quickly became a serious bidding effort. By Thursday morning, the group had raised more than $40 million, twice the high end of the $15 million to $20 million range at which Sotheby's had valued the document, one of just 13 surviving copies of America's foundational principles.
Sotheby's conducted the auction on behalf of Dorothy Tapper Goldman, widow of New York real estate developer S. Howard Goldman, who purchased the copy of the Constitution for $165,000 in 1988. Proceeds from the sale will go to the Dorothy Tapper Goldman Foundation, which is "dedicated to furthering the understanding of our democracy and how the acts of all citizens can make a difference."
The DAO's bid will certainly familiarize many people with ether, which along with bitcoin is one of the world's two major cryptocurrencies. ConstitutionDAO raised money for its bid in the cryptocurrency, which runs on the ethereum blockchain. Two other lots at Sotheby's auction -- Banksy's Trolley Hunters and Love Is in the Air -- were conducted in ether alongside conventional currency.
The rules governing a DAO are automated, a design meant to make them transparent and create trust among a group of people who are potentially strangers. The rules allow for everything from fundraising to decision-making to be carried out through general consensus.
ConstitutionDAO's purchase isn't the first time a cryptocurrency collective has expressed interest in purchasing an expensive artifact. In October, a group called PleasrDAO said it had bought Once Upon a Time in Shaolin, a single-copy album by hip-hop heavyweights the Wu-Tang Clan that was once owned by "pharma bro" Martin Shkreli. Before that, PleasrDAO bought an NFT created by Edward Snowden for $5.5 million.
Almost 17,500 donors contributed to ConstitutionDAO at a median contribution of $206.26. Participants can get refunds of their contributions minus network charges.