Bored Apes Yuga Labs faces investigative SEC probe
The Alpha:
- According to s Bloomberg report, Yuga Labs is facing an investigation by the United States Securities and Exchange Commission (SEC) into the legality of the sale of its high-value NFT offerings.
- Most notably, it includes pieces from the acclaimed Bored Ape Yacht Club collection that has made PFP NFTs a Web3 name.
- Best known in the NFT space for creating the Bored Ape Yacht Club NFT collection, Yuga Labs has used the success of its flagship project to build a burgeoning media empire, spanning the support of major sports leagues, high fashion brands and even a metaverse- clear gaming experience.
- This investigation has not been prompted by any wrongdoing on the part of Yuga Labs. Instead, it’s intended to serve as a way for policymakers and regulators to “learn more about the new world of Web3,” as a Yuga Labs spokesperson noted in Bloomberg report.
Why it matters
The focus of the United States Securities and Exchange Commission’s (SEC) investigation into Yuga Labs is to determine whether the various digital assets it currently offers for sale are in violation of federal law. It includes the Bored Ape Yacht Club NFT collection, its derivative NFT collections and ApeCoin, the BAYC community’s proprietary cryptocurrency. This survey follows a worldwide trend towards greater regulation in the crypto and NFT space. The European Union and the White House have both spearheaded initiatives to make these relatively new areas friendlier—and safer—for investors and consumers alike.
But why look into Yuga Labs? When the Bored Ape Yacht Club NFT collection first burst onto the scene in 2021, it arguably fueled most of the hype that saw NFTers take their first big steps into the mainstream conversation. Thanks in part to how celebrities plastered these high-ticket NFTs on their social media platforms, the NFT market’s 2021 bull run had something of a moment in broader pop culture. Into 2022, and despite the ongoing bear market, we are starting to see the seeds planted by Yuga Labs sprout through the various ways Bored Ape holders have commercialized their prized NFTs.
What will be next
Of course, all this continued buzz has to come at a price. Yuga Lab’s exponential growth into one of the internet’s premier brands has understandably brought the company under a more vigilant lens. After weathering a PR storm that saw a user drum up baseless allegations against its founders, Yuga Labs now has the SEC on its back. But maybe it’s not so bad.
Currently, Yuga has shown a great willingness to cooperate with the SEC as it conducts its investigation and hopes that other notable projects in the NFT space can follow its lead in embracing transparency. “We look forward to working with the rest of the industry and regulators to define and shape the burgeoning ecosystem. As a leader in the space, Yuga is committed to fully cooperating with all inquiries along the way,” a Yuga Labs spokesperson told Bloomberg.
Could this investigation arouse interest in changing almost a century-old decisions of the Supreme Court? It is a possibility. Also mentioned in Bloomberg report is the Howey test – which originates from a 1946 Supreme Court decision. Can this comparably ancient metric hope to categorize what might define the economy of the future? Only time will tell. But based on the cooperation of Yuga Labs, the NFT space can continue to hum along as usual.
