Victory for NFTs: SEC Drops Investigation Into Yuga Labs

• SEC ends probe into Yuga Labs, clearing NFTs securities concerns.
• Yuga Labs’ Bored Apes see brief price rise after SEC’s decision.
• SEC’s move marks a shift in its approach to crypto industry oversight.

The U.S. Securities and Exchange Commission (SEC) has closed its investigation into Yuga Labs, the company behind the Bored Ape Yacht Club (BAYC) NFT collection. The commission launched the investigations in late 2022 to determine whether Yuga Labs’ offerings violated securities laws. Yuga Labs announced the decision in a March 3 post, celebrating it as a major victory for the NFT industry.

SEC’s Investigation on Yuga Labs’ NFTs 

The SEC initially focused on whether Yuga Labs’ NFTs and its ApeCoin token could be classified as securities. This probe was part of the SEC’s broader effort to explore the regulatory status of NFTs, including fractional NFTs. The investigation, launched under former SEC Chair Gary Gensler, questioned whether some NFTs resembled traditional securities and should be subject to federal laws.

Victory for NFTs: SEC Drops Investigation Into Yuga Labs 3

However, The SEC has not publicly explained its reason for dropping the investigation. Yuga Labs has emphasized that the ruling is a significant win for creators and the NFT space. The company reiterated that NFTs should not be considered securities under current U.S. laws.

Yuga Labs is one of the most prominent players in the NFT market. Its flagship collections such as the Bored Ape Yacht Club and Mutant Ape Yacht Club, reached peak values during the crypto bull run. The company also acquired CryptoPunks, another highly popular NFT collection, which further strengthened its position in the NFT space.

SEC Regulatory Approach

This decision to close Yuga Labs’ case aligns with a broader shift in the SEC’s regulatory approach to the cryptocurrency industry. In recent weeks, the SEC has dropped or paused investigations into major crypto companies, such as Coinbase, Kraken, and OpenSea. The agency has also reorganized its crypto division, forming a new Cyber and Emerging Technologies Unit (CETU) to provide clearer regulatory guidelines.

Yuga Labs, led by CEO Greg Solano, has continued to focus on expanding its crypto-native initiatives. The company remains a key player in the evolving NFT landscape despite the market challenges. The end of the SEC investigation provides some relief to the company and its supporters, who have advocated for clearer regulatory frameworks for NFTs and related tokens.

Yuga Labs’ victory signals a shift in how such assets may be viewed under U.S. law. This development may shape the future of NFTs and their integration into the broader financial ecosystem.

Price Action

Following the SEC’s decision, the floor price of Bored Ape NFTs on OpenSea saw a brief uptick, rising to 13.75 ETH. However, the price is still significantly lower than its peak in May 2022 when it reached over 153.7 ETH. Other Yuga Labs collections such as Mutant Apes and CryptoPunks, have also experienced steep price declines in recent months.