According to Bloomberg, citing an anonymous source, the U.S. Securities and Exchange Commission is investigating Yuga Labs, developer of the Bored Ape Yacht Club NFT collection, to see if the company’s sales of digital assets violate federal law.
NFTs under SEC’s Radar
Some of Yuga’s NFTs have allegedly come under scrutiny from the SEC, evaluating whether they should be classified as stocks. If such is the case, the NFTs in question will fall within the jurisdiction of federal securities laws and be subject to the same disclosure requirements as stocks. These probes began in March.
The probe is rumored to be centered on the Bored Ape Yacht Club (BAYC) NFT collection and its spinoff, ApeCoin (APE), which is different from the BAYC in all but name. The ApeCoin website claims that Yuga Labs is a part of the ApeCoin DAO community and plans to use APE as the main currency for all of its future endeavors.
Reportedly, the SEC is investigating the APE ecosystem’s distribution of ApeCoins to Bored Ape Yacht Club, Mutant Ape Yacht Club, and Bored Ape Kennel Club members.
The “unaffiliated” ApeCoin DAO launched ApeCoin in March 2022 and has consistently denied having any kind of official relationship with Yuga Labs. However, Yuga Labs’ recent push into the Metaverse necessitates a native currency, and ApeCoin is intended to fill that role. The sole criterion to join ApeCoin DAO is to hold APE.
About 62% of the total supply of 1 billion ApeCoins was distributed to the ApeCoin community, with 15% of that amount being airdropped to existing NFT holders. Additional tokens were distributed to Yuga Labs, the Jane Goodall Legacy Foundation, launch contributors, and the four creators of Bored Ape Yacht Club.
Following the news, the price of ApeCoin dropped by 6%. At the time of writing, the token is priced at $4.47, down 4.7% over the past 24 hours.