SEC closes investigation into Yuga Labs, ending BAYC and ApeCoin probe

The SEC has concluded its investigation into Yuga Labs, bringing an end to the probe into whether the company’s Bored Ape Yacht Club (BAYC) NFTs and ApeCoin violated federal securities laws.

“After 3 years, the SEC has officially closed its investigation into Yuga Labs,” the company said in a March 3 X post. “This is a huge win for NFTs and all creators pushing our ecosystem forward. NFTs are not securities.”

SEC ends Yuga Labs probe into BAYC NFTs and ApeCoin after two years

In October 2022, the SEC opened a probe into Yuga Labs to examine its NFT offerings and the distribution of ApeCoin.

The SEC aimed to determine whether these digital assets qualified as securities under U.S. law, applying the Howey Test—a legal standard established by a 1946 Supreme Court case.

The watchdog’s probe began under former Chair Gary Gensler. It was part of a wider investigation into NFTs, including probes into NFT creators and marketplaces, to determine whether some, such as fractional NFTs, were securities.

Founded in 2021, Yuga Labs created some of the most sought-after and expensive NFT collections during the market’s peak, including Bored Ape Yacht Club and Mutant Ape Yacht Club. It also bought the rights to CryptoPunks, an early NFT collection that had historically fetched huge sums.

The NFT conglomerate achieved a $4 billion valuation after securing $450 million in funding by 2022.

The firm’s BAYC collection has generated billions in trading volume, making it a prominent player in the NFT space.

SEC softens crypto stance, drops multiple investigations

The SEC’s reported decision to abandon its investigation into Yuga Labs aligns with the regulator’s increasingly lenient stance toward the crypto industry under the Trump administration.

Most recently, the regulator has dropped its investigation of several major crypto companies, including Robinhood, Gemini, UniSwap Labs, Consensys-owned MetaMask, and OpenSea. The SEC has also reached settlements with Coinbase and is reportedly on track to settle its case against TRON’s Justin Sun.

In its announcement that it is dropping its case against Coinbase, the SEC said its Cyber and Emerging Technologies Unit will weed out those that are looking to exploit innovation to harm investors, including through fraud related to blockchain technology and crypto assets.

The SEC has been reversing multiple crypto-related enforcement actions taken under former Chair Gensler, such as dropping a years-old lawsuit against Kraken on March 3.

However, the SEC’s long-standing lawsuit against Ripple remains in active litigation. President Donald Trump recently named XRP one of the coins included in his proposed Crypto Strategic Reserve, alongside Cardano, Solana, Bitcoin and Ethereum.

The price of ApeCoin, a token linked to the Bored Ape Yacht Club ecosystem, has fallen 16% in the past 24 hours amid a broader market pullback.