Yuga Labs part of SEC probe into broader NFT market
Yuga Labs, creator of the popular NFT collection Bored Ape Yacht Club, is reportedly one of several companies under investigation by the Securities and Exchange Commission as it probes the broader NFT market.
The SEC began investigating NFTs earlier this year, Bloomberg reported in March, to determine whether any non-fungible tokens — unique digital assets backed by the blockchain — had violated federal securities rules.
Citing an unnamed source, Bloomberg reported on Tuesday that Yuga Labs is included in that SEC investigation with an investigation into some of the company’s NFTs and ApeCoin, a cryptocurrency issued by the ApeCoin DAO that was adopted by Yuga. The agency has not accused the company of wrongdoing, nor is any lawsuit imminent.
“It is well known that policymakers and regulators have sought to learn more about the new world of Web3,” said a Yuga Labs spokesperson Fortune in a statement. “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.”
The SEC declined to comment.
Despite being founded last year, Yuga Labs has quickly emerged as one of the most important players in NFTs. The Bored Ape Yacht Club collection is among the most popular, with celebrity owners including Justin Bieber and Jimmy Fallon. It also owns the popular CryptoPunks and Mutant Ape Yacht Club collections.
ApeCoin, a cryptocurrency tied to the company’s Bored Ape Yacht Club collection, was issued in March to the owners of Bored Apes and other Yuga Labs NFTs. The cryptocurrency is meant to give Yuga Labs NFT holders leverage over the operations of ApeCoin DAO, the decentralized autonomous organization separate from Yuga that issued the cryptocurrency and operates it, but it also gave some NFT holders thousands of dollars.
The investigation is the latest by the SEC related to crypto or NFTs. Last week, the agency fined socialite and reality TV star Kim Kardashian more than $1 million for allegedly touting a cryptocurrency without disclosing that she was paid to do so.
SEC Chairman Gary Gensler has largely refused to clarify the agency’s stance on which cryptocurrencies are securities, opting instead to “regulate by enforcement,” which includes filing lawsuits against criminals who may not know they’ve broken any rules.
