A source familiar with the matter said the SEC is looking into whether certain NFTs from Yuga Labs could be “more akin to stocks” then just NFTs.
Sources say that the United States Securities and Exchange Commission (SEC) probe into Yuga Labs is a part of a wider investigation into the non-fungible token (NFT) market, which was already reported earlier this year. The probe is likely looking at whether particular NFTs and fractional NFTs could potentially fall under federal securities laws.
Earlier this year, anonymous sources had told Bloomberg that the SEC was investigating NFT creators and certain NFT marketplaces to see whether or not “certain nonfungible tokens are being utilized to raise money like traditional securities.” Bloomberg also reported that the SEC also has a probe into the distribution of ApeCoin, which was given to the holders of Bored Ape Yacht Club (BAYC) and other NFTs created by Yuga Labs.
In addition to the Yuga Labs investigation, the SEC is in an ongoing legal battle with Ripple (XRP) alleging that its sale of XRP — the native token of the XRP Ledger that powers Ripple’s payment network — constituted an offering of unregistered securities. The SEC also has recently settled with Kim Kardashian and fined the ‘Keeping up with the Kardashians’ reality tv star $1 million for failing to disclose that she was paid $250,000 to promote the cryptocurrency Ethereum Max (EMAX), which the agency classifies as an unregistered security.