The US Securities and Exchange Commission (SEC) has concluded its investigation into Yuga Labs, the company responsible for the Bored Ape Yacht Club and CyberPunks NFT collections. The SEC has decided not to pursue any further enforcement actions or issue charges against the firm. Yuga Labs celebrated the closure as a victory for creators and NFTs, emphasizing that NFTs are not securities.
The SEC initiated its probe into Yuga Labs in October 2022, examining whether certain NFTs could be classified as securities under federal law. Specifically, the agency was investigating whether Yuga Labs’ NFT collections, including Bored Ape Yacht Club and related assets, were marketed in a way that could be considered an investment contract under the Howey Test. The SEC also scrutinized the company’s sale of ApeCoin (APE), a cryptocurrency associated with the BAYC ecosystem, to determine its compliance with securities regulations.
The decision to close the case without charges is seen as a significant regulatory victory for Yuga Labs and the NFT industry as a whole. While it provides some clarity for NFT creators and marketplaces, broader questions regarding the classification of digital assets remain unresolved.
This closure is part of a series of SEC case closures in the crypto sector under new leadership appointed by the Trump administration. The agency has recently dropped investigations into Robinhood, Gemini, Uniswap Labs, Consensys, and OpenSea. Additionally, the SEC has settled lawsuits with Coinbase and Kraken and is reportedly working towards a resolution with TRON founder Justin Sun.
This regulatory shift follows years of increased scrutiny from the SEC, which has intensified its enforcement actions against digital asset companies under Chair Gary Gensler. The SEC has argued that many crypto assets, including certain NFTs, meet the definition of securities under the Howey Test. However, industry leaders have pushed back against this classification, asserting that NFTs represent digital ownership rather than investment contracts.
While the SEC’s recent dismissals of cases are significant, its ongoing lawsuit against Ripple remains in active litigation.
