The US Securities and Exchange Commission has officially closed its investigation into Yuga Labs, the company behind the popular Bored Ape Yacht Club and CyberPunks NFT collections. This decision comes as a relief to the NFT community, as the SEC stated that it does not intend to take any further enforcement actions against the firm. In a recent social media post, Yuga Labs expressed their excitement about the closure, calling it a “huge win for NFTs and all creators pushing our ecosystem forward.”
The SEC’s probe into Yuga Labs began in October 2022, with the agency looking into whether certain NFTs could be classified as securities under federal law. Specifically, the SEC was investigating whether Yuga Labs’ NFT collections, including the Bored Ape Yacht Club and related assets, were being marketed in a way that could be considered an investment contract under the Howey Test. Additionally, the agency examined the sale of ApeCoin (APE), a cryptocurrency associated with the BAYC ecosystem, to determine if it fell under securities regulations.
With the SEC’s decision to close the case without issuing any charges, Yuga Labs and the broader NFT industry see this as a significant regulatory victory. This move provides some much-needed clarity for NFT creators and marketplaces, although questions about the classification of digital assets still remain unanswered.
The closure of the Yuga Labs investigation is part of a larger trend of case closures by the SEC in the crypto sector. Under new leadership appointed by the Trump administration, the agency has also dropped investigations into companies such as Robinhood, Gemini, Uniswap Labs, Consensys, and OpenSea. Additionally, settlements have been reached with Coinbase and Kraken, with ongoing discussions reportedly taking place with TRON founder Justin Sun.
This shift in regulatory approach follows years of increased scrutiny from the SEC under Chair Gary Gensler, who argued that many crypto assets, including certain NFTs, could be classified as securities under the Howey Test. However, industry leaders have pushed back against this classification, asserting that NFTs represent digital ownership rather than investment contracts.
Despite the recent dismissals of certain cases, the SEC’s lawsuit against Ripple remains active and ongoing. The outcome of this lawsuit will likely have significant implications for the broader crypto industry moving forward.