A source said the SEC is investigating whether Yuga Labs violated US securities rules via BAYC offerings.
The United States Securities and Exchange Commission (SEC) is reportedly investigating Yuga Labs, the company behind the development of the famous Bored Ape Yacht Club (BAYC) non-fungible token (NFT).
BREAKING: The SEC is investigating Yuga Labs, the creator of the popular Bored Ape Yacht Club NFT collection, over whether its sales of digital assets violate federal law https://t.co/iMRjBO7NpH pic.twitter.com/pk77dgwq4a
—Bloomberg Crypto (@crypto) October 11, 2022
Sources familiar with the matter told Bloomberg that the US SEC is reviewing the project to determine whether it violated the country’s securities laws during the BAYC offering. According to the source, the financial regulator is examining whether Yuga Labs’ NFTs are akin to traditional financial instruments – stocks – which would require the company to follow the same disclosure rules.
The source asked that his identity not be revealed as the ongoing investigation is still private. It should be noted that since the establishment of Yuga Labs, the company has not been charged with any wrongdoing.
Recent developments do not automatically imply that the Securities and Exchange Commission will file a lawsuit against Yuga in the coming weeks.
However, if the SEC is convinced that Yuga Labs violated its rules, the agency can gather as much evidence as possible before formally indicting the company.
Commenting on the development, Yuga Labs said in a statement published by Bloomberg:
“It is well known that policy makers and regulators have sought to learn more about the new world of web3. We look forward to partnering with the rest of the industry and regulators to define and shape the burgeoning ecosystem,” adding that “As a leader in the field, Yuga is committed to fully cooperating with all ongoing requests from road.
At press time, a spokesperson for the US SEC declined to comment on the development. According to the source, the SEC is also investigating whether ApeCoin (APE), a cryptocurrency distributed to BAYC holders, is a security.
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