Yuga Labs, the founders of the Bored Ape Yacht Club NFT collection, is under investigation by the SEC to see whether its digital assets violate federal law. This is not good news for the founders of one of the largest projects in the entire NFT space.

According to Bloomberg, the key question surrounding the probe is whether NFTs can be considered as securities. This has been an ongoing investigation since March.

The SEC is also said to be investigating how ApeCoins, the tokens used with the APE ecosystem were distributed to Bored Ape Yacht Club, Mutant Ape Yacht Club, and Bored Ape Kennel Club members.

Since the tokens were first introduced in March, 62% of the one billion supply of ApeCoins were allocated to the ApeCoin community. Apart from this, additional percentages of tokens were allocated to Yuga Labs and the Jane Goodall Legacy Foundation.

However, Yuga Labs PR materials attempted to distance ApeDAO’s token from the Bored Ape Yacht Club NFT collection. A spokesperson for Yuga Labs has confirmed that they are cooperating with the SEC’s probe.

In case you’re wondering if holders are getting rid of their Apes, yes. To a certain degree, you can see how some fear, uncertainty, and doubt was fostered due to this investigation. Four wrapped Ethereum offers have gone down in the BAYC since news broke of the investigation. Of course, those NFTs are still selling for over $90k, but w’ll have to see what the floor price is when the dust settles.

What’s your take on SEC’s probe of Yuga Labs? Let us know in the comments section.

Sunil Joseph

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