ApeCoin’s (APE), is moving to the negative as Yuga Labs, the U.S. Securities and Exchange Commission (SEC), announces that it will be under investigation. Regulators will investigate a possible violation of securities laws by the creators of non-fungible token collections (NFT), such as Bored Ape Yacht Club.
According to a report from Bloomberg, the Commission will investigate the “affinity” of the digital assets minted and promoted by Yuga Labs and the possibility that these NFTs are “more akin to stocks”. The crypto company would be accused of violating U.S. federal laws.
According to the report, a source close to the situation claims that an investigation will be launched into ApeCoin. This native token supports the ApeCoin governance model and gives its users access the staking platform. Holders can take decisions about the project via this token.
APE was created as part of an initiative that gave BAYC investors more control and influence over the project through the ApeCoin Digital Asset Organization (DAO). Many users expressed concern via social media about the DAO’s future and the staking mechanism that led to the collapse in the price.
Yuga Labs representatives stated in a Bloomberg statement:
It’s well-known that policymakers and regulators have sought to learn more about the novel world of web3. To help shape and define the new ecosystem, we hope to work with regulators and the rest of industry. Yuga, a pioneer in this space is fully committed to cooperating with all inquiries.
ApeCoin And Yuga Labs Are Under SEC Scrutiny
The Commission can launch a probe against Yuga Labs. This could lead to pursuing legal action. But not all probes result in legal action.
The SEC is now focusing on crypto-related activities under the direction of Gary Gensler. On several occasions, the current SEC Chair has compared crypto with the “Wild West” and has classified “most of the crypto” as potential securities. Gensler appears to be the only one willing to publicly admit that Bitcoin is an exception.
SEC enforcement activities against crypto projects have increased in recent months. This seems to be a trend by the Commission against well-known and important entities like Yuga Labs with their projects BAYC or ApeCoin, Kim Kardashian, and many others.
Ripple Payments and the alleged offer of XRP (an unregulated security) is their current largest case. FOX reported that SEC staff believed the Commission was pushing the lawsuit to Gary Gensler, who wants to become Secretary of Treasury.
The Commission is allegedly understaffed and pushing many to seek employment elsewhere as they disagree with Gensler’s management style and complaint about long working hours. Yuga Labs did not respond to my request for information regarding the probe as of the writing.
SCOOP (3/3) @SEC_EnforcementEmployees are complaining @GaryGenslerHyping violates protocol @KimKardashianSettlement, appearing @CNBCWithin minutes after the announcement, individuals with direct knowledge of the matter tell @FoxBusiness. They are calling it a “publicity stunt”
— Charles Gasparino (@CGasparino) October 5, 2022