Yuga Labs, the creator of BAYC, is under SEC investigation
October 12, 2022 5:16 AM
The current state of NFTs is not ideal. Sales of NFTs on several NFT marketplaces, including OpenSea, have dropped significantly, suggesting that the initial excitement surrounding NFTs has faded. Yuga Labs, however, is currently the subject of an SEC investigation, suggesting that NFTs continue to attract a great deal of attention.
Bloomberg reports that the US Securities and Exchange Commission (SEC) is looking into Yuga Labs, the company responsible for developing the Bored Ape Yacht Club (BAYC). Inquiries will focus on whether or not the Bored Ape Yacht Club NFT collection broke any laws.
SEC is looking into whether or not BAYC NFTs qualify as securities
According to the details provided by the source with knowledge of the situation, the SEC is investigating whether or not some of the NFTs sold by Yuga Labs are similar to securities and, if so, should be subject to the same regulations.
The SEC is investigating the distribution of ApeCoin to Bored Ape Yacht Club members and holders of related NFTs. There is no evidence that Yuga Labs engaged in wrongdoing, and the investigation has not been made public.
"It's common knowledge that government officials and regulators have been curious about web3. Our goal is to work with other companies and government agencies to define and shape the developing ecosystem. Yuga, a market leader, has stated its willingness to cooperate with investigators."
The Securities and Exchange Commission is reportedly investigating whether or not ApeCoin acts like a security. In addition to giving holders a say in BAYC's DAO, BAYC also distributed APE to them.
Digital assets, crypto firms, and the entire crypto market are under closer scrutiny than ever before from the regulatory bodies. It's all a part of ongoing efforts to ensure that the crypto market as a whole and all crypto companies are in compliance.