NFTs

SEC Drops Probe Against Bored Ape Yacht NFT Makers

Yuga Labs, the influential company behind the Bored Ape Yacht Club (BAYC) NFT, has announced that the U.S. Securities and Exchange Commission (SEC) has officially closed its investigation against them related to NFTs being considered as “securities.” In a post on X, Yuga Labs stated, “After over three years, the SEC has officially closed its investigation into Yuga Labs. This is a significant win for NFTs and all creators advancing our ecosystem. NFTs are not securities.”

The SEC initially launched its investigation into Yuga Labs in October 2022. The inquiry sought to determine whether certain NFTs were functioning like traditional stocks and should thus be classified as securities under the U.S. regulations. The former SEC Chair Gary Gensler had begun this investigation, which was part of a broad examination of the NFT sector, which focused on creators and marketplaces, particularly those dealing with fractionalized NFTs.

At its prime time, Yuga Labs was a leading player in the NFT market, well known for producing some of the highest attractive digital collectibles. In addition to its lead ship Bored Ape Yacht Club and Mutant Ape Yacht Club collections, the company had seized their rights to CryptoPunks, a pioneering NFT series that once commanded high prices.

As per the SEC’s announcement, the floor price of Bored Ape NFTs saw a moderate increase, reaching at the price of 13.75 ETH (approximately $29,650). However, in May 2022 it lasted below its all-time high price of 153.7 ETH, which was valued over $430,300. As per CoinGecko reports, Yuga Labs’ Mutant Ape NFTs and ApeCoin had reduced by 95% from their 2022 highs. The floor price of CryptoPunks has also dropped by more than 70% from its peak.

The SEC’s closure of the Yuga Labs investigation aligns with a broader shift in its enforcement strategy toward the cryptocy industry. Recently, the NFT marketplace OpenSea confirmed that the SEC had also terminated its investigation into the platform. Additionally, on March 3, the SEC withdrew its lawsuit against Coinbase and dismissed its case against Kraken.

CEO of Custodia Bank, has blamed the U.S. government for its lack of action on crypto debanking since the potential return of former President Donald Trump to office. Long noted that while there may be a perception of policy shifts, federal banking agencies have made no reversals of anti-crypto regulations. “It is still considered unsafe and unsound for a bank to engage with digital assets, even in minimal amounts,” she stated, highlighting that no regulatory changes regarding crypto banking have been implemented.

Reports suggest that enforcement actions against cryptocurrencies in the United States may lessen under the anticipated administration of Republican President-elect Donald Trump, with a shift in regulatory priorities expected. During a conference held in New York, the current and former senior government lawyers highlighted that, while financial fraud cases will still be pursued, the Justice Department’s aim is likely to shift toward immigration enforcement, a key campaign promise of Trump.

Terron Gold