Story Highlights SEC closes Yuga Labs investigation without penalty or charges. The decision supports the position that NFTs are not securities. The SEC’s kinder stance suggests evolving cryptocurrency restrictions. The US Securities and Exchange Commission (SEC) closed down its probe against Yuga Labs, owner of Bored Ape Yacht Club (BAYC) non-fungible token (NFT) venture and ApeCoin (APE). The SEC will not pursue any enforcement and close the investigation launched in October 2022. Yuga Labs confirmed the ruling, describing it as a resounding win for the NFT space and digital creators. The company said the ruling supports the notion that NFTs are not securities, an issue debated in regulatory and legal communities for years. SEC Shuts Down Investigation of Yuga Labs Without Charges The
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Story Highlights
- SEC closes Yuga Labs investigation without penalty or charges.
- The decision supports the position that NFTs are not securities.
- The SEC’s kinder stance suggests evolving cryptocurrency restrictions.
The US Securities and Exchange Commission (SEC) closed down its probe against Yuga Labs, owner of Bored Ape Yacht Club (BAYC) non-fungible token (NFT) venture and ApeCoin (APE). The SEC will not pursue any enforcement and close the investigation launched in October 2022.
Yuga Labs confirmed the ruling, describing it as a resounding win for the NFT space and digital creators. The company said the ruling supports the notion that NFTs are not securities, an issue debated in regulatory and legal communities for years.
SEC Shuts Down Investigation of Yuga Labs Without Charges
The SEC initially investigated whether Yuga Labs’ sale of NFTs and ApeCoin distribution were securities laws. The probe was part of a series of regulatory actions on digital assets throughout former SEC Chairman Gary Gensler’s time in office, including NFT projects, fractionalized assets, and token distributions. Regulators applied the Howey Test, the test employed to ascertain whether an asset is a security. If Yuga Labs’ NFTs or ApeCoin had failed this test, the company could have faced draconian regulatory measures and heavy fines.
The Yuga Labs case settlement is not unique. The last few months have witnessed the Securities and Exchange Commission (SEC) closing several cryptocurrency-related investigations with no enforcement action being taken. The case against Robinhood, Gemini, Uniswap Labs, MetaMask, and OpenSea has also been settled. The agency has even settled high-profile cases with Coinbase and Kraken, suggesting a possible change of heart in the regulation of digital assets. Apecoin is now at $0.5382, falling by 12.74% in the last 24 hours.
For Yuga Labs and the wider NFT industry, the SEC’s ruling is a welcome regulatory respite. Had the agency moved to enforce, it might have established a precedent to label numerous NFT projects as securities, with attendant compliance obligations. Instead, this ruling implies a more measured approach by the SEC as it grapples with the developing crypto ecosystem.