A source said the SEC is investigating whether Yuga Labs violated U.S 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 non-fungible token (NFT) Bored Ape Yacht Club (BAYC).
BREAKING: The SEC is investigating Yuga Labs, the creator of the popular NFT collection Bored Ape Yacht Club, over if its digital assets sales 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 U.S SEC is scrutinizing the project to determine whether it violated the country’s securities laws during the offering of BAYC. According to the source, the financial regulator is examining whether the Yuga Labs’ NFTs are akin to traditional financial instruments – stock – which would require the company to follow the same disclosure rules.
The source requested that his identity should not be revealed because the ongoing investigation is still private. It is noteworthy that since the creation of Yuga Labs, the company has not been indicted of any wrongdoings.
The recent development does not automatically imply that the Securities and Exchange Commission will slam a lawsuit against Yuga in the coming weeks.
However, if the SEC is convinced that Yuga Labs breached its rules, the agency may gather as much evidence as possible before officially charging the company.
Commenting on the development, Yuga Labs said in a statement published by Bloomberg:
“It’s well-known that policymakers and regulators have sought to learn more about the novel world of web3. We hope to partner with the rest of the industry and regulators to define and shape the burgeoning ecosystem,” adding that “As a leader in the space, Yuga is committed to fully cooperating with any inquiries along the way.”
At press time, a spokesperson for the U.S. SEC declined to comment on the development. Per the source, the SEC is also investigating whether ApeCoin (APE), a cryptocurrency distributed to BAYC holders, is a security.