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Yuga Labs SEC investigation timeline: Are Bored Ape NFTs securities?

By Raphael Sanis


Bored Ape Yacht Club
Created by Yuga Labs, Bored Ape Yacht Club is an NFT collection of over 10,000 portraits – Photo: mundissima / Shutterstock

Yuga Labs, the company that created the Bored Ape Yacht Club non-fungible token (NFT) collection, is under investication by the US Securities and Exchange Commission (SEC).

According to Bloomberg, the SEC is examining whether these tokenised ape portraits are securities.

APE, the native cryptocurrency, has suffered as a result and is down more than 10% since the news broke.

Investigation details and timing

The SEC has only started an investigation, according to Bloomberg. It has not accused Yuga Labs of breaking federal law.

However, an SEC probe has been opened to determine if the collection should be classed as a security and therefore follow the same disclosure rules that secutities have to under US law.

The commission applies the Howey test to determine whether an asset is classed as a security. This requires the asset to be an investment contract that has the intention to be profitable.

It is not unprecedented for an NFT collection to be determined as a security. Regulators in Texas and Alabama ordered the Sand Vegas Casino Club to stop selling its tokens, arguing they were unregistered securities.

Yuga Labs told Bloomberg: “It’s well-known that policymakers and regulators have sought to learn more about the novel world of Web 3.0. We hope to partner with the rest of the industry and regulators to define and shape the burgeoning ecosystem.”

This is a private investigation, according to Bloomberg. There are no public details about the timeline of the case or any noted dates. requested a comment from the SEC about the timeline of the case. But the commission was not able to comment on “the existence or nonexistence of a possible investigation”.


381.90 Price
+0.950% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50


0.58 Price
-9.160% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168


63,634.40 Price
-1.410% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00


0.12 Price
-3.370% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

Apecoin's involvement

The commission is also investigating the distribution of apecoin (APE), the native cryptocurrency belonging to the Bored Ape NFT collection.


APE is a governance and utility ERC-20 token, which was designed to be used throughout the Bored Ape ecosystem. Its main purpose is to incentivise growth within the community.

Apecoin uses a decentralised autonomous organisation (DAO) to facilitate this, where APE holders vote on various proposals, including those that impact its ecosystem funds.

Investors have not responded positively to this news. The price of APE has plummeted over the past week. As of 17 October, apecoin was down 12% in the previous seven days.

Ripple vs SEC

The Yuga Labs news comes as the SEC’s case against the Ripple blockchain company entering its final stages.

The commission sued Ripple in December 2020, arguing that XRP was a security and the company had raised more than $1bn through unregistered transactions.

While Ripple expects a verdict in the first half of 2023, it is unclear when, if at all, the SEC would open a case into Yuga Labs.

Markets in this article

0.8291 USD
-0.034 -4.100%
Ripple / USD
0.57547 USD
-0.05748 -9.160%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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