Business In News
- Yuga Labs is under investigation by the U.S Securities and Exchange Commission
- The investigation revolves around the sale of BAYC NFTs and ApeCoin tokens.
- As far as a lawsuit is concerned, no charges have been filed by the SEC yet.
- ApeCoin is down 11% following news of the probe.
The United States Securities and Exchange Commission (SEC) has launched a probe into Yuga Labs Inc, the firm behind the popular NFT collection Bored Ape Yacht Club (BAYC).
According to a report published by Bloomberg, the SEC is looking into the offering of BAYC NFTs and whether the sale should have been disclosed to the financial watchdog.
In addition to the NFT sales, the financial watchdog is also reportedly looking into the distribution of ApeCoin, a token that was given to owners of BAYC and other NFT collections by the firm earlier this year.
Bloomberg’s report cited unnamed sources, who claimed that the agency is investigating the crypto firm’s potential violation of federal law. The crux of the investigation remains whether Yuga Labs’ NFT and the token offering be subjected to similar disclosure rules as stocks.
As of now, Yuga Labs has not been accused of any wrongdoing and no charges may be filed against the firm despite the investigation.
“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.
ApeCoin is down 11%
Data from CoinMarketCap shows that ApeCoin, the token in question has dropped more than 11% since the news of the Yuga Labs probe came out. It is currently trading at $4.68 and has lost more than 10% of its market capitalization.
Interestingly, the trading volume of ApeCoin has surged more than 150% following the news of the investigation, indicating that traders are not missing out on the chance to exploit the volatility.
SEC’s anti-crypto campaign
Yuga Labs is the latest in a long line of firms in the digital asset industry to face the wrath of the wall street regulator. SEC Chair Gary Gensler has repeatedly been accused of hostile behavior against the crypto industry.
“Regulation by enforcement”, is a phrase that is now synonymous with enforcement actions carried out by the SEC, given the attempts by the regulator to overreach its jurisdiction in an attempt to regulate asset classes that do not fall under its purview.
The SEC has long argued over the status of crypto assets as securities. That debate may come to a conclusive end with the verdict in the ongoing SEC v. Ripple lawsuit.