SEC Investigates Yuga Labs for Bored Ape NFTs

SEC investigates Yuga Labs for potential securities violations in NFT token issuance

The US Securities and Exchange Commission (SEC) has doubts that non fungible tokens from collections created by Yuga Labs companies infringe federal law because of their similarity to stocks. This is to be part of a larger investigation into the range of issued NFT tokens and their fractional parts.

The creators of the NFT Bored Ape series have exposed themselves to SEC

The companies behind the most popular collections of non fungible tokens, namely the Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), and the creators of CryptoPunks have reportedly been targeted by an American independent state agency. The Americans are allegedly investigating whether individual NFT tokens, as well as their smaller parts, do not violate applicable federal securities laws.

A number of people familiar with the case report to the media that the SEC is investigating more widely into the non fungible token market. According to this US government agency, there is a very strong similarity between NFT tokens and stocks. Therefore, selling some of these digital assets would violate federal law.

Not only collections from Yuga Labs are watched by the SEC. As early as March this year, anonymous sources reported that the authority is looking at certain NFT developers and platforms to investigate that certain NFT tokens are not being used to raise money in the same way as traditional securities. One SEC representative then explained that he did not confirm or contradict the information about the ongoing investigation into the case.