Yuga Labs says SEC has dropped its investigation into the NFT firm
Update (March 4, 12:15 am UTC): This article has been updated to add price information on ApeCoin and Yuga Labs’ NFTs.
Non-fungible token (NFT) conglomerate Yuga Labs says the US Securities and Exchange Commission has closed its investigation into the company.
“After 3+ years, the SEC has officially closed its investigation into Yuga Labs,” the company said in a March 3 X post. “This is a huge win for NFTs and all creators pushing our ecosystem forward.”
“NFTs are not securities,” it added.
Bloomberg first reported in October 2022 that the SEC opened a probe into Yuga Labs to determine if certain NFTs were more like traditional stocks and, therefore, securities under US laws.
Source: Yuga Labs
The regulator’s probe started under former Chair Gary Gensler and was part of a wider investigation into NFTs — which included probes on NFT creators and marketplaces — to see if some tokens, such as fractional NFTs, were securities.
Yuga Labs was behind some of the most popular and high-priced NFT collections when the market was at its peak, including the Bored Ape Yacht Club and Mutant Ape Yacht Club. It also bought the rights to CryptoPunks, an early NFT collection that had historically fetched huge sums.
The floor price of Yuga Labs’ flagship Bored Ape collection saw a slight bump after the company’s post to 13.75 Ether (ETH), around $29,650, but is down over 0.5% in the past day, according to OpenSea data.
The collection is still over 90% down from its May 2022 peak floor price of 153.7 ETH, which would’ve priced the cheapest Bored Ape NFT around $430,300 as ETH traded at $2,800.
Yuga Labs’ Mutant Ape NFTs and a token tied to the company’s NFTs called ApeCoin (APE) are also both down 95% or more from their 2022 peaks, CoinGecko shows. CryptoPunks floor prices are also down over 70% from the collection’s peak.
The SEC’s reported abandoned investigation into Yuga Labs comes as the regulator has been easing its approach toward the crypto industry under the Trump administration.
Related: US crypto reserve no substitute for SEC clarity — Industry exec
Late last month, the NFT marketplace OpenSea said the SEC closed its investigation into the platform, which came just hours after the regulator dropped its lawsuit against crypto exchange Coinbase.
The SEC has dismissed other crypto-related enforcement actions it launched under Gensler, having also dropped a lawsuit against crypto exchange Kraken on March 3.
The SEC and Yuga Labs did not immediately respond to a request for comment.
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Yuga Labs, the prominent creator of the Bored Ape Yacht Club NFT collection, has recently announced that the Securities and Exchange Commission (SEC) has concluded its investigation into the company and its NFT platform. This investigation was initially launched to assess whether Yuga Labs’ digital assets, including popular NFTs, could be classified as securities under U.S. law.
The company confirmed this development via a statement on social media, indicating that it had cooperated fully with the SEC throughout the inquiry. Yuga Labs maintained that its NFTs do not constitute securities, asserting that these assets serve as forms of digital art and community engagement rather than traditional investment vehicles.
This conclusion comes as a significant relief for Yuga Labs and the broader NFT market, which has experienced intense scrutiny from regulators regarding the classification of digital assets. By confirming that the inquiry has ended without penalty, Yuga Labs aims to reinforce its standing in the NFT space and to focus on expanding its product offerings.
Yuga Labs CEO, Nicole Muniz, expressed optimism about the future, emphasizing the company’s commitment to innovation in the NFT ecosystem. She highlighted the importance of transparency and compliance in building trust with their community of artists, collectors, and enthusiasts.
In recent months, Yuga Labs had been at the forefront of discussions about the regulatory landscape for digital assets. The SEC’s approach towards the NFT space remains somewhat ambiguous, leading to heightened uncertainty regarding compliance. However, the closure of Yuga Labs’ investigation might signal a potential easing of regulatory pressures for NFT projects as the agency continues to refine its stance on the status of digital collectibles.
During this period of regulatory uncertainty, numerous NFT projects have faced challenges, with some founders opting to cease operations or pivot entirely in response to evolving regulations. However, Yuga Labs’ proactive stance and legal foresight in addressing the SEC’s inquiries have positioned it favorably in an increasingly competitive market.
Despite the conclusion of the SEC’s investigation, the broader NFT landscape remains dynamic. The industry continues to witness a range of developments, from collaborations between artists and brands to entry by traditional institutions into the digital collectibles space. Observers will be watching closely to see how Yuga Labs leverages this moment to enhance its offerings and deepen community engagement.
With the SEC’s investigation formally closed, Yuga Labs is expected to unveil new initiatives and projects designed to engage its audience and expand its influence. The company envisions a future where its digital assets not only provide aesthetic enjoyment but also foster community building and collaboration among creators and collectors.
