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SEC investigating BAYC creator Yuga Labs over unregistered offerings (ApeCoin)

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US Securities and Exchange Commission (SEC) has started a probe on Bored Ape creator Yuga Labs, according to a report by Bloomberg. The investigation that will be done by SEC is to see whether the main NFT collection from Yuga Labs, i.e. Bored Ape Yacht Club has violated federal law.

SEC is examining whether BAYC NFTs are securities, according to watcher.guru coverage. SEC is looking into the possibility of whether the NFT collection sold under the BAYC name and the ApeCoin distributed to the holders is similar to securities and whether the same rules should be followed by BAYC as it is done on securities.

“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,” Yuga said in a statement.

One of the parts of the investigation is how ApeCoin was distributed to the Bored Ape Yacht Club NFT owners and to the owners of the other collections under the same entity, including Mutant Ape Yacht Club and others. The probe is not yet made public so there is nothing that proves that Yuga Labs has committed any misconduct.

Market response: As soon as the news of the SEC investigation on Yuga Labs became public, the ApeCoin token price dropped from US$5.15 to $4.75 within a span of two hours, almost a 10% drop and forming further negative candles as this story is being written.

This isn’t a rare investigative procedure followed by the SEC in the recent times as such probes have been regularly done to ensure that the rules are properly followed by both, the market traders as well as by the crypto firms.

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