Yuga Labs a leading force in the NFT market and creator of Bored Ape Yacht Club has officially put an end to a long-running regulatory battle The company announced that the US Securities and Exchange Commission SEC has closed its investigation into its operations marking a significant moment for the NFT industry
After three years the SEC has officially closed its investigation into Yuga Labs the company stated in a March 3 post on X formerly known as Twitter The company framed the decision as a victory not just for itself but for the broader NFT space reaffirming its position that NFTs are not securities
The SEC initially launched its probe into Yuga Labs in October 2022 amid growing concerns over whether certain NFTs functioned similarly to stocks and should be classified as securities under US regulations This investigation was part of a broader crackdown on the crypto and NFT industries led by former SEC Chair Gary Gensler Regulators were particularly focused on fractionalized NFTs which allow investors to own shares of high-value digital assets
At the height of the NFT boom Yuga Labs dominated the market producing some of the most sought-after digital collectibles Its Bored Ape Yacht Club and Mutant Ape Yacht Club collections became status symbols among celebrities and crypto investors The company also acquired CryptoPunks one of the earliest and most influential NFT projects
Following the announcement the NFT market saw a slight uptick The floor price of Bored Ape NFTs climbed to 1375 ETH approximately 29650 dollars though it remains far below its May 2022 all-time high of 1537 ETH then valued at 430300 dollars Other Yuga Labs assets have also struggled in the post-boom NFT landscape The company’s Mutant Ape NFTs and its ecosystem token ApeCoin have plummeted by over 95 percent from their 2022 highs according to CoinGecko Even CryptoPunks once considered a gold standard in digital collectibles has seen a 70 percent decline from its peak
While the market reaction to the SEC’s decision was modest it signals a positive shift in sentiment for NFT holders and industry players who have long feared overreach from regulators
The SEC’s decision to close its Yuga Labs probe appears to be part of a broader shift in regulatory strategy regarding crypto enforcement Late last month OpenSea one of the largest NFT marketplaces confirmed that the SEC had dropped its investigation into the platform Additionally on March 3 the SEC abandoned its lawsuit against Coinbase and dismissed its case against Kraken signaling a potential de-escalation of regulatory scrutiny
This changing approach suggests that US regulators may be reconsidering their stance on digital assets possibly laying the groundwork for clearer guidelines instead of aggressive enforcement actions
Despite these regulatory shifts some industry leaders believe the US government’s stance on crypto remains problematic Custodia Bank CEO Caitlin Long has criticized federal banking agencies for failing to reverse restrictive policies against crypto companies She stated last week that it is still presumed unsafe and unsound for a bank to touch a digital asset even in a de minimis amount emphasizing that no meaningful changes have been made to crypto banking regulations
While Republican President-elect Donald Trump has suggested a more crypto-friendly stance Long remains skeptical about whether federal agencies will follow through on reversing anti-crypto banking policies Speaking at a recent legal conference in New York former senior government lawyers echoed this sentiment suggesting that while financial fraud cases in crypto will still be pursued the Justice Department’s priorities may shift toward immigration enforcement aligning with Trump’s key campaign promises
With the SEC closing its investigation into Yuga Labs and easing pressure on other major crypto companies the industry may finally see some regulatory breathing room However challenges remain The NFT market is still struggling compared to its 2021 and 2022 highs and regulatory uncertainty continues to loom over digital assets Nonetheless for now Yuga Labs and the wider NFT space can celebrate a rare regulatory win in an industry often marred by legal battles
