We have entered an era where artworks are traded like securities. With the institutionalization of the “Art investment contract security,” fractional investment platforms are entering the formal financial sphere. Companies like YeolMae Company and Artipio are leading this movement, promoting a new fusion of art and finance. For investors, it presents a new concept called “Art-Tech,” and for issuers, it suggests opportunities for diversifying revenue models and expanding the market.

However, the market response has fallen far short of expectations. Low subscription rates and increasing self-underwriting by issuers indicate that the market has yet to build meaningful trust. Most crucially, it raises the fundamental question: Do the artworks underlying these securities actually meet the basic standards of investable assets?


 
The First Doubts About Work Suitability

In early 2025, Artipio issued its first art investment contract security based on David Hockney’s iPad drawing,〈30th May 2021, From the Studio〉.

While Hockney is undoubtedly a globally recognized name, this particular work was Edition No.11 out of 25 — a digital print with limited rarity or uniqueness. The digital format itself further weakens its liquidity and long-term value in the secondary market.

Despite these clear limitations, Artipio purchased the work for hundreds of millions of KRW and issued it as a financial product — a move that appears to have prioritized name recognition over artistic or intrinsic value. This decision highlights a troubling tendency to favor superficial recognizability over curatorial discernment when determining what constitutes a bankable artwork.



A Structural Lack of Curatorial Competence

The same problem emerged in Artipio’s second offering. This time, the underlying asset was Alex Katz’s〈Cymbidium Yellow on Red〉, a painting that deviates from his most iconic style and lacks significant market visibility. It has low liquidity and limited transaction records, making it a questionable candidate for securitization. Predictably, investor demand was poor, and the issuer was forced to absorb most of the offering itself.

This repeated pattern points to more than a marketing failure — it exposes a deep structural flaw: the absence of curatorial expertise within the securitization framework. Selecting artworks for financial products requires analysis of the artist’s place in art history, collector demand, gallery representation, and market comparables. Currently, such comprehensive evaluation appears absent from the selection process for these securities.



The Problem of Missing Experts

Firms like YeolMae Company and Artipio claim to conduct their own valuation and selection processes, but few verifiable details exist about the experts involved.

YeolMae has promoted its proprietary algorithm for art valuation, but the methodology remains undisclosed. Since artworks are not traded on real-time exchanges and have inherently unstable pricing, valuations rely heavily on qualitative factors — comparable sales, artist trajectories, and market narratives. This makes the role of trained art experts absolutely critical. Inadequate valuation processes undermine the credibility of public disclosures and erode investor trust.



Market Reactions and Structural Limits

As of mid-2025, both of Artipio’s investment securities have recorded disappointing subscription rates. The first Hockney-based product reached only 39.3%, while the second Katz-based one fell further to just 13.3%. In both cases, the issuer had to underwrite the majority of the offering, signaling that the products failed to function as true public offerings.

YeolMae Company faces similar challenges. Its 2024 revenue fell by 33% year-over-year, and delays in new securities offerings have forced it to rapidly pivot toward NFTs and art-backed loans. These moves reflect a deeper reality: the art securities market is not yet institutionally, regulatorily, or commercially ready to succeed.



The Danger of Financial Experiments Without Artistic Insight

Attempts to financialize art are not new, but successful cases remain few and far between. Artistic value cannot be reduced to fame or surface-level attributes. Context, historical significance, collector interest, and expert validation all matter.

Yet the current crop of art investment securities in Korea largely sidesteps these elements, focusing instead on external packaging and speculative promise. This not only destabilizes the market but also undermines investor confidence.



What the Market Needs is Not Technology, But Discernment

Turning art into financial products requires far more than technical tools or structural innovation. It demands deep knowledge of art and a nuanced understanding of the market. Without the eye of the curator, robust data on the art economy, or the ability to interpret the cultural narrative around artists and works, no financial product can be sustainable — let alone credible.

Artipio’s decision to offer a high-priced digital edition drawing by David Hockney as its flagship investment product reveals the stark absence of artistic judgment in the market.

Products created by people who cannot recognize artistic value are doomed to fail. The real crisis in the art securities market today is not a lack of innovation, but a lack of competence, responsibility, and vision among those leading it.