A recent report from Bloomberg suggests that the United States Securities and Exchange Commission (SEC) has begun looking into the dealings of Yuga Labs Inc. Usually, when this happens, the SEC is looking to uncover whether or not the firm violates any federal securities laws with any of its offerings.
SEC Comes For Yuga Labs and Its Token
Yuga Labs is well known for creating the most popular non-fungible token (NFT) collection — the Bored Ape Yacht Club BAYC. However, according to inside sources, SEC might be readying to probe some of the company’s NFTs, which it believes should be regarded as stocks.
Furthermore, the report also claims that the regulator will be looking into the native token of the BAYC-inspired ecosystem — the Ape Coin (APE). According to Bloomberg, that as well might be an unregistered security.
Recall that the token was launched barely six months ago. And although a large percentage (approximately 62%) went to the community, the remaining tokens were shared between Yuga Labs, the BAYC team, as well as other launch partners.
Meanwhile, as is to be expected, the APE price has reacted to the news of the SEC’s investigation. Per CoinMarketCap data, APE is down by nearly 10%, and could be seen trading at $4.62 as of press time.
A Major Blow, Maybe?
Without a doubt, the sudden scrutiny might put a sizeable amount of pressure on Yuga Labs, which is arguably one of the biggest players in the NFT world at the moment.
Other than the BAYC collection, the firm is also behind other notable NFT collections like CryptoPunks and Meebits. And it recently raised $450 million in funding to reach a $4 billion valuation.
So far though, Yuga Labs has not been found guilty of any wrongdoing. At least, not yet. But whatever might be the case, the firm has agreed to work cooperatively with regulators whenever the need arises.