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Yuga Labs announced that the U.S. Securities and Exchange Commission (SEC) has closed its investigation into the company.
The NFT firm shared the update on March 3 in a post on X (Twitter), stating that after more than three years, “the SEC has officially closed its investigation into Yuga Labs.”
The post also described the decision as “a huge win for NFTs and all creators pushing our ecosystem forward,” adding, “NFTs are not securities.”
The SEC began investigating Yuga Labs in 2022 to determine whether certain NFTs qualified as securities under U.S. law. At the time, regulators were scrutinizing several major players in the Web3 space.
Yuga Labs is behind some of the most well-known NFT collections, including the Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club. The company also acquired the rights to CryptoPunks, one of the earliest NFT collections, which had sold for significant sums in the past.
However, its major collection, BAYC, has struggled in recent years, in part due to regulatory uncertainty and SEC actions. In April 2023, it saw a sharp drop in floor prices, reaching its lowest level since 2021.
By September, some BAYC NFTs had lost up to 80% of their value. BAYC #5115, for example, sold for 11.24 ETH (around $27,353), far below its purchase price of 51.15 ETH ($233,653) three years earlier.
Despite the downturn, the SEC’s decision to close investigations into NFT-related cases could bring some optimism to the market. Last month, the SEC also ended its probe into OpenSea, dropping allegations that NFTs were unregistered securities.
However, other NFT projects have faced regulatory actions. CyberKongz and Immutable were also targeted, each receiving a Wells notice from the SEC. The Flyfish Club, an NFT-based dining venture, settled with the SEC for $750,000 in September 2024 over claims of offering unregistered securities.
Impact Theory, a media company, was fined $6.1 million in 2023 for its “Founder’s Keys” NFT series. Other cases include Stoner Cats, which paid a $1 million penalty, and Dapper Labs, which settled a lawsuit over NBA Top Shot NFTs for $4 million
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