The United States Securities and Exchange Commission is investigating Yuga Labs over whether its Bored Ape Yacht Club Ethereum NFTs and the ApeCoin token are unregistered securities, according to Bloomberg.
The report, which cites an unnamed source, claims that the agency is exploring whether the crypto startup broke federal law by issuing NFTs that act like stocks, as well as exploring the distribution of the Ethereum-based ApeCoin token that launched earlier this year. Yuga Labs has not yet been accused of any wrongdoing and the investigation may not necessarily lead to charges, per the report.
“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,” Yuga Labs told Bloomberg in a statement. “As a leader in the space, Yuga is committed to fully cooperating with any inquiries along the way.”
The Bored Ape Yacht Club is one of the most successful NFT projects to date, with the main collection of 10,000 NFTs initially selling to the public at $190 worth of EthereumEthereum apiece. That sale yielded Yuga roughly $1.9 million. Follow-up and spinoff projects, the Mutant Ape Yacht Club and the Otherside metaverse game, then raked in $96 million and $319 million, respectively.
BAYC has also generated nearly $2.5 billion worth of secondary trading volume, per data from CryptoSlam. Mutant Ape Yacht Club and Otherside have added another $3.35 billion worth of secondary trading volume to that tally. Yuga Labs earns a 2.5% royalty fee on each of those sales.
Bored Ape NFT owners are entitled to various benefits, including access to a private community and live events, as well as the ability to use their owned illustration to create and sell derivative artwork and projects. Many of the NFTs have sold for seven-figure sums, and the project has attracted a number of celebrity owners as it has gained popularity.
The Biggest Celebrity NFT Owners in the Bored Ape Yacht Club
CryptoPunks might have kicked off the NFT profile picture trend, but the Bored Ape Yacht Club is making even stronger inroads to collectors who aren’t deeply immersed in crypto culture. Yuga Labs’ Ethereum-based NFT project—which has yielded more than $2 billion in secondary trading volume across three collections—counts a growing number of celebrity owners, including big names like TV host Jimmy Fallon, athletes including Stephen Curry and Shaquille O’Neal, and musicians like Marshmello and Pos...
Furthermore, Bored Ape NFT holders have been granted various past benefits, including free Bored Ape Kennel Club, Mutant Ape Yacht Club, and Otherside NFTs, plus an allotment of ApeCoin when that token launched in March.
Officially, ApeCoin was not created or launched by Yuga Labs—it was issued by the Ape Foundation, which is fronted by a board that includes prominent Web3 builders like Reddit co-founder Alexis Ohanian and FTX Ventures head Amy Wu.
That approach was apparently chosen due to regulatory concerns, although Bloomberg reports that the SEC is still investigating the launch and distribution of the token. Yuga Labs and its founders have benefited greatly from the launch of ApeCoin, which has a current price of about $4.75 per token and a market cap of just over $1.5 billion.
ApeCoin: What Is the Bored Ape Ethereum Token and Who Gets It?
After being officially revealed just yesterday, ApeCoin (APE)—the Ethereum-based token for the growing Bored Ape Yacht Club ecosystem—is now flowing. Launched today for NFT holders to claim, some 93 million tokens have already been snagged. That’s about $810 million worth. While current Bored Ape and Mutant Ape NFT holders will benefit most initially, given that they all get a free stash of valuable tokens that they could sell off, anyone can buy APE from popular exchanges. But why would you wan...
ApeCoin’s price tumbled shortly after the report was published, and now is down about 9% over the last 24 hours per data from CoinGecko.
The SEC has increased its scrutiny of the crypto and NFT markets under the leadership of chair Gary Gensler, who was named to the post in April 2021. Gensler has shared a view that nearly any other crypto token besides Bitcoin could be a security, and has pursued a number of recent actions—including naming nine tokens listed on Coinbase as securities.
Editor's note: This article was updated after publication to include additional details about Yuga Labs and the sale of Bored Ape NFTs and ApeCoin.
