SEC Drops Investigation into Yuga Labs
Estimated Reading Time: 3 minutes
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 minutes to learn more
After more than three years, Yuga Labs announced that the U.S. Securities and Exchange Commission (SEC) has officially ended its investigation into the company. Yuga Labs shared the news in a March 3 post on X (formerly Twitter), calling it a major victory for the Non-Fungible Token (NFT) space and digital creators.
According to the company, it was emphasized that NFTs are not securities, supporting their view that these digital assets should not be treated like traditional stocks.
The SEC had started its investigation in 2022 to determine whether certain NFTs, including those from Yuga Labs, should be classified as securities under the country’s law. This investigation was part of a bigger effort to look into how the NFT market operates, especially concerning fractional NFTs. However, with the current decision, Yuga Labs is no longer under investigation.
Yuga Labs and the NFT Market
Yuga Labs is known for creating some of the most valuable NFT collections, including the Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC). At its peak, the BAYC collection had NFTs selling for hundreds of thousands of dollars.
The company also acquired CryptoPunks, one of the earliest and most famous NFT collections. At this junction, despite the recent positive news about the SEC dropping the case, NFT prices remain far lower than their all-time highs.
SEC’s Changing Stance on Crypto
Compared to the administration under former Chair Gary Gensler, the SEC had been aggressively investigating NFTs, marketplaces, and crypto companies to see if their tokens qualified as securities. The SEC’s decision to drop the Yuga Labs investigation is part of a broader shift in how the agency is handling crypto-related cases. The case against Yuga Labs was one of many similar investigations.
To this end, the SEC has started easing its approach. Just last month, OpenSea, a major NFT marketplace, revealed that the SEC had also closed its investigation into its platform. Additionally, the SEC dropped its lawsuit against Coinbase and dismissed a case against crypto exchange Kraken on the same day it ended the Yuga Labs probe. This suggests a possible change in how regulators are handling cryptocurrency and NFTs moving forward.
In order to place winning trades with us via Bybit, you can open an account here.
