Yuga Labs, the Blockchain Innovator Behind the Popular Bored Ape Yacht Club (BAYC) Non-Fungible Token (NFT) Series, Declared Today

Yuga Labs, the blockchain innovator behind the popular Bored Ape Yacht Club (BAYC) non-fungible token (NFT) series, declared today that the U.S. Securities and Exchange Commission has concluded its inquiry

Yuga Labs, the blockchain innovator behind the renowned Bored Ape Yacht Club (BAYC) non-fungible token (NFT) series, has announced that the U.S. Securities and Exchange Commission has closed its inquiry into the company without taking any further action.

The regulator’s scrutiny of Yuga Labs began in October 2022, with the SEC’s Division of Enforcement kicking off the probe.

The agency was examining the classification of Yuga’s NFTs and its native token, apecoin (APE), using the criteria of the Howey Test to decide if they should be covered by federal securities laws.

Such a classification would have implicated these assets in a regime of continuous reporting obligations, compliance protocols, and broader disclosure requirements.

This development is unfolding amid a broader narrative of heightened U.S. regulatory scrutiny of digital asset markets.

The Biden administration has prioritized rolling out new rules for crypto firms in areas like institutional custody, exchange registration, and the issuance of new digital assets.

This follows a period of rapid innovation in blockchain technology, leading to the creation of new asset classes like NFTs, which have surged in popularity.

Announcing the closure of the case, Yuga Labs said: “After 3+ years, the SEC has officially closed its investigation into Yuga Labs. This is a huge win for NFTs and all creators pushing our ecosystem forward. NFTs are not securities.”

The news comes as the SEC has been shutting down a series of probes into crypto companies.

Earlier this month, Coinbase disclosed that the SEC had terminated its inquiry, which began in September 2021, aiming to identify any violations of U.S. securities laws.

In March, Gemini announced the closure of the SEC’s probe, which started in November 2021, focusing on Gemini’s crypto products and services.

In February, Kraken reached a settlement with the SEC to resolve a case over its crypto staking service.

The agency also dropped its inquiry into Opensea, and a report by The Block claims that the SEC has closed its probe into Robinhood.

This development also follows a recent federal court ruling in favor of HEX founder Richard Heart.

The judge threw out the SEC’s case against Heart, finding that the agency had failed to sufficiently demonstrate its jurisdictional reach to pursue claims related to Heart’s cryptocurrency endeavors.

These cases highlight the challenges faced by the SEC in policing the fast-evolving digital asset markets with decades-old legal doctrines.

Moreover, they come amid a broader shift in the agency’s priorities with the transition from Donald Trump to Biden.