Yuga Labs, the creator of the popular NFT collection Bored Ape Yacht Club, is reportedly one of several companies under investigation by the Securities and Exchange Commission as it probes the broader NFT market.
The SEC began investigating NFTs earlier this year, Bloomberg reported in March, to determine whether some non-fungible tokens—unique digital assets backed up by the blockchain—had ran afoul of federal securities rules.
Citing an unnamed source, Bloomberg reported Tuesday that Yuga Labs is included in that SEC investigation with a probe into some of the company’s NFTs and ApeCoin, a cryptocurrency issued by ApeCoin DAO that was adopted by Yuga. The agency has not accused the company of wrongdoing, nor is any lawsuit imminent.
“It’s well known that policymakers and regulators have sought to learn more about the novel world of Web3,” a Yuga Labs spokesperson told Coins2Day in a statement. “We hope to partner with the rest of the industry and regulators to define and shape the burgeoning ecosystem. As a leader in the space, Yuga is committed to fully cooperating with any inquiries along the way.”
The SEC declined to comment.
Despite being founded just last year, Yuga Labs has quickly emerged as one of the most important players in NFTs. Its Bored Ape Yacht Club collection is among the most popular, with celebrity owners including Justin Bieber and Jimmy Fallon. It also owns the popular CryptoPunks and Mutant Ape Yacht Club collections.
ApeCoin, a cryptocurrency tied to the company’s Bored Ape Yacht Club collection, was issued in March to the owners of Bored Apes and other Yuga Labs NFTs. The cryptocurrency is meant to give Yuga Labs NFT holders influence over the operations of ApeCoin DAO, the decentralized autonomous organization separate from Yuga that issued the cryptocurrency and runs it, but it also made some NFT holders thousands of dollars.
The investigation is the just latest by the SEC linked to crypto or NFTs. Last week, the agency fined socialite and reality TV star Kim Kardashian more than $1 million for allegedly touting a cryptocurrency without properly disclosing that she was paid to do so.
SEC chair Gary Gensler has largely refused to clarify the agency’s position on which cryptocurrencies are securities, choosing instead to “regulate by enforcement,” which includes bringing actions against wrongdoers who may not know they’ve violated any rules.