The U.S. Securities and Exchange Commission (SEC) has officially closed its investigation into Yuga Labs, the company behind popular NFT collections like Bored Ape Yacht Club and CryptoPunks. The probe began in late 2022 and ended with no charges filed against the company.
Yuga Labs Wins SEC Case
Yuga Labs announced the news on March 3 through a post on X. “After 3+ years, the SEC has officially closed its investigation into Yuga Labs,” the company wrote. “This is a huge win for NFTs and all creators pushing our ecosystem forward.”The company added firmly: “NFTs are not securities.”
This statement addresses the core issue of the investigation, which sought to determine if certain NFTs should be treated as traditional securities under U.S. law. The SEC launched its probe into Yuga Labs in October 2022 under former Chair Gary Gensler. The investigation was part of a broader examination of the NFT market, including creators and marketplaces.
Regulators were looking at whether some tokens, particularly fractional NFTs, met the definition of securities under the Howey Test. This legal standard helps determine if an asset falls under SEC jurisdiction. The investigation also covered Yuga Labs’ sale of ApeCoin, a cryptocurrency connected to the Bored Ape ecosystem.
The SEC was examining whether this token should be considered a security. Yuga Labs created some of the most expensive NFT collections during the market’s peak. The Bored Ape Yacht Club and Mutant Ape Yacht Club collections were among the most valuable in the space.
The company also purchased the rights to CryptoPunks, an early NFT collection known for its high sale prices. These collections helped establish Yuga Labs as a major player in the NFT market.
NFT Market Still Down
Despite this regulatory win, Yuga’s collections are still far below their peak values. The floor price for a Bored Ape NFT is around 13.75 Ether (about $29,650). This represents a more than 90% drop from its May 2022 peak when the floor price was 153.7 ETH (approximately $430,300). Other Yuga assets have seen similar declines.
Mutant Ape NFTs and ApeCoin are down 95% or more from their 2022 peaks. CryptoPunks floor prices have fallen over 70% from the collection’s highest point. The decision to end the Yuga Labs investigation is part of a broader shift in the SEC’s approach to crypto regulation. Under the Trump administration, the agency has been easing its stance toward the digital asset industry.
The SEC recently closed its investigation into NFT marketplace OpenSea. This announcement came just hours after the regulator dropped its lawsuit against crypto exchange Coinbase. The agency has also dismissed other crypto-related enforcement actions. On March 3, the SEC dropped a lawsuit against crypto exchange Kraken.
Despite these case closures, some legal battles continue. The SEC’s lawsuit against Ripple remains active in the courts. For NFT creators and collectors, the SEC’s decision clarifies the regulatory status of these digital assets. However, broader questions about digital asset classification remain unsettled.
The post NFTs Are Not Securities: SEC Ends Yuga Labs Investigation appeared first on CoinCentral.
Final thoughts
Officially closing its inquiry into Yuga Labs, the firm behind well-known NFT collections like Bored Ape Yacht Club, without any charges registered, the SEC considers this result a significant victory for the NFT market since it confirms that under U.S. law NFTs shouldn’t be handled as securities. Beginning in 2022, the research sought whether several NFTs and the ApeCoin cryptocurrency fit the definition of securities. Despite this triumph, Yuga Labs’s products have seen notable price drops; the floor price for Bored Ape NFTs dropped over 90% from their 2022 peak.
This ruling signals a more relaxed attitude toward the NFT market and fits a more significant change in the SEC’s regulatory approach to digital assets. Although this closing clarifies creators, issues about the more general classification of digital assets remain unresolved since continuous legal battles like the SEC’s action against Ripple still find their way through the courts.
