Yuga Labs Celebrates SEC's Decision to Drop Investigation Into Bored Apes NFTs

The U.S. Securities and Exchange Commission (SEC) has officially closed its investigation into Yuga Labs, the creator of the popular Bored Ape Yacht Club (BAYC) NFTs. This decision marks a significant victory for the NFT sector, affirming that NFTs are not classified as securities under federal law.

Key Takeaways

• The SEC's investigation into Yuga Labs has been closed without any enforcement action.

• Yuga Labs views this as a major win for the NFT industry and its creators.

• The closure follows a broader trend of the SEC easing its regulatory stance on the crypto sector.

Background of the Investigation

The SEC initiated its investigation into Yuga Labs in October 2022, under the leadership of former chair Gary Gensler. The probe aimed to determine whether Yuga Labs' NFT offerings and the distribution of its ApeCoin token violated federal securities laws. The investigation was part of a larger inquiry into the NFT market, assessing whether certain NFTs could be classified as securities.

Yuga Labs' Response

In a statement, Yuga Labs expressed relief and satisfaction with the SEC's decision, stating, "After more than three years, the SEC has officially closed the investigation on Yuga Labs. This is a great victory for NFTs and for all creators who advance our ecosystem. NFTs are not securities." This sentiment reflects a growing belief within the NFT community that these digital assets should not be subjected to the same regulations as traditional securities.

Market Reaction

Following the announcement, the floor price of Bored Apes on the NFT marketplace OpenSea saw a slight increase, rising by 3.8% to approximately 13.9 ETH. However, it is important to note that the value of Bored Apes has significantly declined from its peak, which was around 153.7 ETH in May 2022. Currently, the floor price is down over 90% from that high, indicating the volatility and challenges faced by the NFT market.

Broader Implications for the Crypto Sector

The SEC's decision to drop the investigation into Yuga Labs is part of a larger trend of the agency reassessing its approach to the cryptocurrency and NFT markets. Recently, the SEC has also closed investigations into other major players in the crypto space, including OpenSea and various exchanges like Coinbase and Kraken. This shift suggests a potential easing of regulatory pressures on the industry, which could foster innovation and growth.

Conclusion

The closure of the SEC's investigation into Yuga Labs is a pivotal moment for the NFT industry, signaling a potential shift in regulatory attitudes towards digital assets. As Yuga Labs continues to expand its initiatives and the NFT market evolves, this decision may pave the way for greater acceptance and understanding of NFTs as unique digital assets rather than securities. The future of NFTs looks promising as creators and collectors alike celebrate this significant victory.

Sources

• SEC drops Yuga Labs probe, Trump files NFT marketplace trademark: Nifty Newsletter, Cointelegraph.

• Bored Ape Creator Yuga Labs Says SEC Closing Investigation in 'Huge Win' for NFT Sector, Decrypt.

• Bored Ape NFT Maker, Crypto Co. Say SEC Threats Are Over, Law360.

• The SEC closes the investigation against Yuga Labs: the Bored Ape Yacht Club NFTs are safe, The Cryptonomist.

• Yuga Labs says SEC has dropped its investigation into the NFT firm, Cointelegraph.