Amir Soleymani, a computer programmer and art collector, is suing the digital art site Nifty Gateway for allegedly changing the terms of an auction moments before it started. The auction sold a non-fungible token (NFT) called ‘Abundance’ by the digital artist Beeple, whose work recently set a new auction record at auction earlier this year.

Nifty Gateaway hosted the auction in May, during which Soleymani lost out on securing the top bid for the NFT. The winning bidder of $1.2 million (£890,000) came from co-founder of Ethereum, Taylor Gerring. Soleymani claims he was unaware that the remaining top 99 bidders were subsequently expected to purchase another edition of the work. Bidders paid a ranked amount, and since the Liverpool-based computer programmer was third in line he is now required to pay $650,000 (£480,000).

“Imagine bidding to win an item, ending up in second place and getting almost the same thing the third bidder gets but with a significant difference in bid amount,” explained Soleymani. “This method of auction maximises revenue for the platform and artists but is damaging to collectors.”

The lawsuit has been filed with the High Court. It states that the terms Soleymani agreed to in February were altered in April, arguing also that the enforceability of arbitration clauses are questionable with the client’s “right to be sued in this country.”

According to a statement, Nifty Gateway are “vigorously opposing these proceedings.” The site, which is owned by billionaire brothers, Cameron and Tyler Winklevoss, has since had Soleymani’s account and assets frozen after he refused to pay the amount.

Soleymani responded on his Twitter that his “legal team is yet to receive any response from them in regards to the UK legal action nor the arbitration they started in NY.”

As a relative newcomer to the art market, NFTs have been hailed as the evolution of fine art collecting, whipping up a frenzy amongst digital art collectors. NFTs are part of the Ethereum blockchain, a form of cryptocurrency, that means the digital artwork cannot be copied.

“There are still many uncertainties around NFTs and the contractual structures they can involve—from questions raised by SMART contracts to copyright and licensing issues—matters lawyers will no doubt chew over for some time to come,” said Emily Gould, a senior researcher at the Institute of Art and Law. “The old adage ‘caveat emptor’ (‘may the buyer beware’) holds true as much in the world of NFT sales as in any marketplace – perhaps even more so.”

Fred Clark, Associate in Boodle Hatfield LLP’s art team, said “this shows how fraught with risk purchasing NFTs can be. It is unlikely to be the last legal action in an area where there is a multiplicity of potential issues.”