SEC probes Yuga Labs for unregistered securities sale

The U.S. Securities and Exchange Commission (SEC) is probing Bored Ape Yacht Club creator Creator Yuga Labs over whether sales of its digital assets violate federal law as per a Bloomberg report. 

An anonymous source close to the issue cited by Bloomberg, said that the agency is also investigating the startup over the distribution of their governance and utility tokens, ApeCoin.

Apecoin was introduced in March 2022 when the ApeCoin DAO and the Ape Foundation were established. 62% of the fixed one billion supply of ApeCoins were distributed among Bored Ape Yacht Club, Mutant Ape Yacht Club and Bored Ape Kennel Club members while 15% went to existing NFT holders. The remainder of the tokens were allocated to Yuga Labs, the Jane Goodall Legacy Foundation, as well as launch contributors and the four founders of Bored Ape Yacht Club.

Yuga Labs is currently under investigation on whether some of its project’s NFTs more closely resemble stocks and if they should follow the same disclosure rules. The investigation does not imply an incipient lawsuit or wrongdoing at this stage.

'It’s well-known that policymakers and regulators have sought to learn more about the novel world of web3,' Yuga told Bloomberg in a statement. ‘As a leader in the space, Yuga is committed to fully cooperating with any inquiries along the way.’

ApeCoin has fallen nearly 10% over the past 24 hours after the publication of the Bloomberg report. 

Photo: ApeCoin DAO