Logan Paul’s $16.49 million sale of the PSA 10 Pikachu Illustrator card at Goldin in February 2026 set a public auction record, but the transaction has triggered legal threats from fractional investors. Ripple CTO Emeritus David Schwartz criticized the deal’s structure, arguing that it concentrated upside with the sponsor while distributing downside risk to retail participants.
Why David Schwartz called deal “awful”
The whole controversy started with Liquid Marketplace, a collectibles platform that Paul cofounded. It lets users buy fractional interests in high-value assets. Investors are now saying that, after the reported $16.5 million sale, they are not getting a fair share of the profits.
The dispute is all about a clause that apparently let Paul buy back shares at their original price before selling them on again.
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Supporters of the structure say that the terms of the contract were made clear and that the buyback provision defines the economic limits of participation. Critics counter that this can create imbalance, especially when the valuation goes up a lot after fractionalization.
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David Schwartz, known for his work on XRP Ledger blockchain architecture and Ripple CTO Emeritus, spoke out about it on X. He called the structure “awful” and said there was a mismatch in what the different parties were motivated by.
According to Schwartz, the arrangement shifted the risk of price decline to fractional holders while reserving the benefit of appreciation for the main owner. He did not go into legal conclusions but framed the issue as one of economic design and fairness.
Reports online say that a class action lawsuit might be coming against Paul and his associate, Mike Majlak. The plaintiffs are expected to argue that retail investors were misled about the practical impact of the buyback clause.
