This is Part 3, the final chapter in the genesis saga of Bright Moments and Seth Goldstein, whose NFT art gallery was allegedly robbed of $4.3 million of digital art in August. Make sure to read Part 1 and Part 2 if you haven’t already.

By July of 2021 the Venice, California digital art gallery Bright Moments and its founder Seth Goldstein were about halfway through their Icarus journey. People all over the U.S. had heard about the gallery giving away non-fungible tokens, or NFTs, worth tens of thousands of dollars. All you had to do was come to the beach town to collect your NFT in person. Bright Moments was growing rich and popular and overachieving what almost everyone involved had expected.

Success, however, attracts all sorts of get-rich-quick scams—and does so vividly in the crypto world. People who will slap your back one day will stab you there the next. At the time of the heist in August, the Crypto Venetian project was in some respects getting out of hand. It was getting bigger than Seth, than gallery member Phil Mohun, than the whole Bright Moments community.

You can’t give away $10,000 to people and not expect to open the looney bin. As the summer wore on, Seth was having to turn people away, like a family of four who had driven hours from California’s Central Valley, each one expecting to mint their own Crypto Venetian. Seth put the brakes on that.

“We hadn’t anticipated the emotional dynamics,” Seth said. “People started to scam us.” It wasn’t all bad, both Phil and Seth pointed out. Some of the staff in the neighborhood had been able to get in on the Crypto Venetians, and the value of what they now owned changed their lives. While amazing on that end of the spectrum, the scammier end was excruciating

Crypto Venetian #618 which @squrlmusic was given on Aug. 7 and sold on Aug. 9

“I had to suddenly become the asshole, be the karma police and make people cry,” Seth said. To help weed out the avarice on the waiting list Seth asked people to send in videos of why they wanted a Crypto Venetian. That didn’t entirely work either. One entrant on Instagram, @squrlmusic, began his video by saying how he’d give anything to own a Crypto Venetian, and lamented that some people were flipping them.

“They don’t even care about the beauty of what they are,” he said in the video. “They don’t understand the art.” Sure, he said, flippers could make some money, “but what is that worth, when you could have the coolest little dude or duderette on your phone for the rest of forever?”

@squrlmusic was chosen, and he minted his beloved Crypto Venetian on Aug. 7. He sold it for 6.2 ether two days later (worth about $19,500 at the time). Seth saw this happen over and over.

One night not long after, Seth, Phil and Jesse Rogers, a Bright Moments DAO member, went out to the Venice boardwalk to figure out what to do.

“A switch flipped in July and this Crypto Venetians thing is taking off,” Phil told me. Handing out what was in effect tens of thousands of dollars to people “is scary,” he said. “You tend to attract some bad actors. In terms of team security, there was a feeling there towards the end in August that we need to get these things out of our hands as soon as possible.”

He went on, “there is a real chance that something happens that we are not prepared for.”

Out on the boardwalk that night, Seth, Jesse and Phil knew they held the keys to the kingdom and debated how quickly to wrap up the remaining minting ceremonies. This was a hard call as the members of Bright Moments, and most certainly Seth, felt the most important aspect of the giveaway was the personal experience of coming to the gallery. The emotions tied to that unveiling were helping to create a far-flung community, Seth and the others believed.

The Venice boardwalk

The next morning, Aug. 11, Art took that problem off their hands, relieving the gallery of its 309 remaining Crypto Venetians.

“It was embezzlement of the highest order,” said Louie Ryan, owner of Menotti’s and Townhouse bar. He called Art “a rat” and “a wolf in sheep’s clothing but I wouldn’t insult the species.”

Louie grew up on the north side of Dublin and by this point in his life already had a famously successful run by having created L.A. live-music venue icons Temple Bar and Zanzibar before buying Townhouse in 2006. As a Venice insider, Louie was one of the first people to accept Seth into the fold and became an early member of the Bright Moments DAO.

“There was a warmth and a sense of community here,” he said of the Bright Moments/Townhouse circle. Louie’s son Liam introduced him to crypto five years earlier, and Louie found the educational aspect of the Crypto Venetian project alluring.

“It became a way to teach crypto fluency to people who hadn’t gotten into crypto before,” he said. “Teaching people to give is the key thing here.”

As I spoke to Louie I got the sense that the lost experiences of the Crypto Venetian minting is what upset him most. Well, that and the feeling of being ripped off, and being ripped off by someone within their community. “I was in New York when I got the news, and I was just really saddened and disappointed,” Louie said.

“It was embezzlement of the highest order”

— Louie Ryan

He made the point that the current lack of clear guidelines for much of the crypto world make this a tough case. Who’s to say it crossed into being illegal from an enforcement point of view, Louie said.

“Maybe the law isn’t defined and written yet, but when something begins to gain value, when the Crypto Venetians start to gain value, and they’re being traded for three or four or five ether and you come in and take 309 of those, you’ve taken $4.3 million out of the DAO’s coffers,” he said. “Can he be punished legally for that? I don’t know, but we’re going through the investigation.”

If Art didn’t break the law he did cross a norm, according to Phil Mohun.

“He violated a social contract,” Phil said. “The only reason the project was working was because of that social contract.”

Art declined to speak to me for this story, didn’t answer a list of questions I sent and hung up on me when I reached him on his cell phone. After part one of this story came out, he did text me to ask if I was in New York for an NFT conference, but I was in Los Angeles.

He did speak to Seth, though, remember? The two met near the Venice skate park on Sunday Aug. 15. Seth walked into that meeting bemused by the spy-vs-spy clandestine feel of it, how Art insisted he put his phone in a bag and put it on a nearby bench. Yet Seth also didn’t know how Art would respond to being confronted about the heist.

Art didn’t have a gun, which is a thought that had crossed Seth’s mind. But he did want Seth to hear his side to the story.

Based on notes Seth took after their meeting, Art wanted to be seen as a hero for exposing the flaw in the DAO design that let him mint the remaining Crypto Venetians. He said he did it intentionally, that they weren’t stolen because he paid Bright Moments tokens for them. And he said he was tired of being slandered.

He hated that the NFT marketplaces Art Blocks and Open Sea delisted the Crypto Venetians he put up for sale, saying that went against the immutable nature of blockchain, according to Seth’s notes, which Seth shared with me.

“That really foiled his get rich quick scheme,” Seth said.

“There are moments when you have to cut through a lot of the dogma of decentralization and just get shit done”

— Seth Goldstein

At the same time, Art had been wildly twisting events around the time of the heist, according to several people I spoke to. Such as when Seth told Art on the phone that he was only five minutes away in case Art ever wanted to talk about stuff. Seth was reaching his hand out, in other words, but Art took it as a threat that Seth was only five minutes away.

“That you could take one piece of information and take it out of context and blow it up, that’s what trolls do,” Seth said. “After that I was like, ‘fuck him, he’s toxic.’”

While Seth almost always maintains his “chill Venice self,” as he said to me, there’s also a bare-knuckle fighter under that Lone Wolf cap. He was much older than almost anyone in the Bright Moments DAO. He had turned 50 as he was first settling into Venice and getting the lay of the land. He’d been through failures as well as success. And he’d be damned if he was going to let one errant member of Bright Moments burn it down.

“I knew not to argue with him, not to negotiate with him; I was just there to listen,” Seth said. “What he actually said to me is humiliating, it’s very vindictive and angry and demeaning.”

At the same time, the gallery was getting set to host 150 people that evening to unveil their next project, Crypto New Yorkers. Behind the scenes, some members were already scouting real estate for the gallery they’d eventually open in SoHo. Seth had to keep everyone on track, to make sure the financial hit from the heist didn’t stop their momentum.

“I’m very, very trusting, to a fault,” he said. As an entrepreneur, he found his failures usually came from trusting people too much, or, trusting the wrong people too much.

“We’re at a stage right now where being a DAO is a bit of a Rorschach Test. It’s whatever you want it to be,” Seth said. “There are moments when you have to cut through a lot of the dogma of decentralization and just get shit done.”

He went on, “It kind of gets to the heart of the whole notion of decentralization and DAOs – if I hadn’t been so fucking stubborn to just see it through, with all that leadership ego attached, if I had stepped back and said, ‘oh, let’s vote on this,’ it would’ve fallen apart.”

There’s a lesson here for anyone forming a DAO. It will need a strong leader at the beginning, there’s almost no way around this. There was a great tweet on this subject recently (which of course I can’t find) that described the early days of a DAO as the core members being the parents and the rest are children. The parents have most of the power in the beginning but then the kids grow up and create their own lives and responsibilities.

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After thirty minutes, Art got on his bike and pedaled away. Seth came back to Winward to his awaiting friends and family. According to Seth, that evening Art began sending random Crypto Venetians to the wallets of a few DAO members – and even one to Bob Iger, who gave it back to the gallery.

The 309 people waiting their turn to get a Crypto Venetian certainly got the shaft, and through no fault of their own. Art focused a lot of anger on Bright Moments and Seth by leaving those people in the lurch. Travel plans and airline reservations from people all over the country had to be canceled.

It’s unclear what the LAPD can make of this case. The FBI’s criminal investigative division is a more logical fit. There are two sides to it. The design of the Bright Moments DAO depended on trust and a social contract. Yet at the same time store owners place trust in their night managers to not raid the till and the end of the shift. According to his twitter feed, Art is all about NFTs. Not surprising. While I haven’t used his real name here the Bright Moments community knows exactly who Art is and he must get a cold shoulder around a lot of LA, if he’s still in the city.

As the summer turned to fall, attention at Bright Moments turned east. The New York City project was gaining a good head of steam. Here’s a shocker – Seth changed the way future in-person mintings would be awarded and managed. You now needed a special token which would be surrendered at the SoHo gallery to unlock your Crypto New Yorker.

“Willy Wonka had Golden Tickets,” Seth wrote in a post on Mirror. “We have Golden Tokens.” One thousand were created with the gallery selling 200 of them for 2 Ether. The rest they gave away to “a carefully chosen group of people that reflect the values that we want to establish in our genesis Crypto New Yorker mints,” as Seth put it on Mirror.

The golden tokens sold out within 20 minutes, raising about $1.2 million that was desperately needed to keep the gallery afloat.

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A post shared by Bright Moments (@brightmomentsgallery)

One of the last times I spoke to Seth was over the phone while he was in Lower Manhattan getting the new gallery set up. They’d just snagged an exclusive show for December where Tyler Hobbs would be revealing 100 NFTs exclusively in the gallery. The twist here is that the NFTs are still unknown to the people who paid $7 million sight unseen. They have to come to Bright Moments on Wooster St. in December to see what they bought.

More recently, the gallery went through the week-long extravaganza-slash-conference “NFT NYC,” which took place in early November. This is where the Crypto New Yorkers were minted in real life a la the Venice model

Life was good, in other words, Seth and Bright Moments were moving past the heist and how it sowed fear, uncertainty and doubt in the DAO members.

The journey had taken Seth from the euphoria of believing that crypto and NFTs and the communities they create are making the world a better place to the ugly side of life where betrayal and chaos must be dealt with.

“You never really start from scratch,” Seth said. “I wanted to think that moving to Venice with a whole new group of people, not working with anybody from my past – it was a clean slate.”

“I felt I was very much near the end of my career, I needed to go from player to coach,” he said. The Bright Moments juggernaut swept those doubts away, he’d found a new path and a new career and it was all the more sweet for having pulled it out of the flames.

“What you sensed in me at the end was really a kind of profound relief, because up until the very moment of selling those tickets [to the New York event], I was concerned it was all going to fall apart,” Seth said. “And that he would’ve won.”

In New York in August, as the new gallery had sold out of its Crypto New Yorker tokens , Seth sat on the stoop near a storefront, talking to friends and Bright Moments DAO members. He looked visibly pained and elated in equal measure. A woman was filming and asked him how he felt. He looked right in the camera with reddened, bothered eyes.

“Fuck you [Art],” he said. “You can’t take this away from us.”