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Yuga Labs, which is the largest NFT project in the world (Bored Ape Yacht Club), has become the next target of an SEC probe. The debate on the definition of a financial asset is fiery again.
Unregistered offerings?
The Miami-based project is famous for creating the Bored Ape Yacht Club, which was one of the first generic NFT collections in the world and resonated with the crypto ecosystem. Among the holders of the collection are well-known figures such as Mark Cuban, Madonna, Justin Bieber, Neymar Jr and Post Malone. These typically include actors, artists, and investors.
The SEC (Securities and Exchange Commission), the main regulatory body for financial markets in the US, has launched a preliminary investigation into the unregistered issuance of financial instruments by Yuga Labs. The allegations are said to relate to certain NFTs, which the SEC believes may be more akin to equities. And by extension, shouldn't they also comply with the rules that apply to them?
Yuga Labs has never been sued by regulators yet, and the probe does not necessarily mean that the company will face any penalty.
"Itâs well-known that policymakers and regulators have sought to learn more about the novel world of web3. We hope to partner with the rest of the industry and regulators to define and shape the burgeoning ecosystem," - Yuga Labs said in a statement to Bloomberg News
Is Crypto regulation coming in a big way?
The SEC's probe, along with other involvement from regulators in web3, in recent months may be evidence that the time of complete freedom may be coming to an end. Crypto, like other asset classes, may face regulation regarding project controls, token issuance, ratings and much more. The law will possibly have to be adapted to the specific characteristics of the ecosystem, for example, the difference between the PoS (Proof of Stake) and PoW (Proof of Work) blockchains.
What does this mean for ApeCoin?
ApeCoin has lost 10.3% of its value since news of the SEC investigation was announced. After an initial drop of nearly 11%, the token today is recovering from a local low by gaining 1.4%. The token emerged in March this year and then scored a rally, gaining around 190%. Since its peak at the end of April, ApeCoin has fallen by around 80%.
Author Bio
Daniel Kostecki is an award-winning senior market analyst and a Director of the Polish branch of Conotoxia Ltd. He is a victor of the FxCuffs statuette for âBlog of the Yearâ and âPersonality of the Yearâ. He has 15 years of experience on the financial markets and a diploma in Economics from the University of Szczecin in Poland. Daniel isprivatelyconnected to the financial markets since 2007 and professionally - since 2010. Author of numerous commentaries and analyses of the situation on the financial markets and a guest on Polish TV, press and radio.
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