US SEC Probes Yuga Labs to Determine If Bored Ape NFTs Are Securities

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US SEC Probes Yuga Labs to Determine If Bored Ape NFTs Are Securities

<p class="MsoNormal">The United States Securities and Exchange
Commission (SEC) has reportedly launched an investigation into Yuga Labs Inc.,
to determine whether the firm's Bored Ape Yacht  Club (BAYC) non-fungible
tokens (NFT) are securities.</p><p class="MsoNormal">Bloomberg in a report cited a source familiar
with the enquiry as saying that the US financial markets regulator wants to
determine if the digital asset company's sale of its NFTs should have been
subjected to the same disclosure requirements required of firms that offer stocks to the public.</p><p class="MsoNormal">The SEC in its rules and regulations
require securities firms to disclose and share market-related information when
new securities such as stocks and bonds are issued to the public.</p><p class="MsoNormal">Bloomberg reports that while Yuga Labs has not
been accused of violating any laws, the probe could determine whether the
firm's offering of the BAYC NFTs contrived federal securities law.</p><p class="MsoNormal">The BAYC, which as of this year is worth over
US$1 billion, was minted on April 20, 2021, and was launched for pre-sale three
days later by Yuga Labs. The NFT collection was built on the Ethereum
blockchain.</p><p class="MsoNormal">The probe is also seeking to determine if Yuga
Labs' launch of ApeCoin in March violates any federal laws and if the native
cryptocurrency passes as an unregistered security.</p><p class="MsoNormal">Sections 3 and 4 of the US Securities Act of
1933 (as amended) provide for certain securities and specific transactions in
securities to be offered for sale without registration with the SEC. </p><p class="MsoNormal">The outlet reports that Yuga Labs has pledged
cooperation with the SEC and looks forward to future
collaborations with other regulators.</p><p class="MsoNormal">As of the time of filing this report,
CoinMarketCap reports that ApeCoin has gone down 7.79% in the last 24 hours.</p><p class="MsoNormal">"The live ApeCoin price today is $4.75 USD with
a 24-hour trading volume of $344,818,255 USD," the crypto asset price tracking
firm wrote on its website.</p><p class="MsoNormal">Case against Ripple</p><p class="MsoNormal">The SEC's focus on Yuga Labs comes on the heels of
the regulator's probes into NFT markets to determine if some of the assets can
be categorized as securities.</p><p class="MsoNormal">Earlier in the year, the agency's enforcement
lawyers sent out queries and subpoenas on the matter to digital asset
companies.</p><p class="MsoNormal">Meanwhile, the SEC has <a href="https://www.financemagnates.com/cryptocurrency/news/ripple-reveals-sec-action-xrp-crashes/">been battling
with</a> Ripple Labs Inc., a
blockchain company, claiming its native cryptocurrency, XRP, can be categorized
as a security.</p><p class="MsoNormal">In April, Ripple <a href="https://www.financemagnates.com/cryptocurrency/news/ripple-lawyer-claims-a-very-big-win-against-sec-in-court/">claimed 'a
very big win'</a> against the SEC after a
US Judge, Sarah Netburn, denied a request by the markets supervisor to the court to reconsider shielding documents in which William Hinman, its former
Director of the Division of Corporation Finance, admitted that Bitcoin and
Ether cannot be categorized as securities.</p>

This article was written by Solomon Oladipupo at www.financemagnates.com.

Source: US SEC Probes Yuga Labs to Determine If Bored Ape NFTs Are Securities