NFTs are not in their best shape now. The whole hype seems to have worn off, which is evident in the notable drop in NFT sales on several NFT marketplaces, including OpenSea. However, the scrutiny over NFTs doesn’t seem to wear off as Yuga Labs faces an investigation from the SEC.
Yuga Labs, the company behind Bored Ape Yacht Club (BAYC), is under investigation by the US Securities and Exchange Commission (SEC), according to Bloomberg. The goal of the investigation is to determine whether a federal law was violated by the Bored Ape Yacht Club NFT collection.
As per the details from the person familiar with the matter, the SEC is looking into the possibility of whether a few of the NFTs sold by Yuga Labs are similar to securities and whether they should follow similar rules.
The SEC is also looking into how ApeCoin was distributed to owners of the Bored Ape Yacht Club and associated NFTs. The probe has not yet been made public, and the investigation doesn’t prove that Yuga Labs has committed any misconduct.
Yuga Labs disclosed their full cooperation with the investigations in a statement saying, “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. As a leader in the space, Yuga is committed to fully cooperating with any inquiries along the way.”
The SEC is also investigating the potential that a security-like property exists in ApeCoin. In addition to giving the holders APE, BAYC gave them a say in their DAO.
The regulators are now paying more attention to digital assets, crypto companies, and the overall crypto sector. It is a part of ongoing efforts to make sure that crypto businesses and the entire market abide by the rules.