The creators of Bored Ape Yacht Club (BAYC), Yuga Labs, are being investigated by the U.S Securities and Exchange Commission (SEC).
A Bloomberg report citing unnamed sources claims that Yuga Labs may have violated several federal laws over the sale of its highly prestigious Apecoin cryptocurrency.
Per the report, the SEC has launched a probe into Yuga Labs intending to enquire whether Yuga Labs' NFTs are securities and Apecoin is similar to traditional stocks.
BAYC vs SEC
A U.S watchdog has claimed that some of Yuga Labs' projects may have broken federal laws. According to Bloomberg, the agency has launched an investigation to determine whether the sale of BAYC NFTs was similar to a stock offering and should have been subject to stock allocation and disclosure laws.
In addition, the SEC's probe into Yuga Labs is also examining the distribution of Apecoin, which was given to holders of BAYC. Apecoin was launched as part of Yuga Labs' vision to expand its user base and the BAYC ecosystem.
The investigation is the latest move of the SEC under the leadership of Gary Gensler, who is well-known for having a strong stance on law violations in the crypto realm.
Gensler has remained consistent in his efforts to bolster regulation in the crypto industry and has issued multiple statements on how crypto assets should be regulated by the SEC as some of them possess elements similar to securities.
Apart from investigating Yuga Labs, the SEC has launched several probes into multiple crypto companies, including Ripple and Coinbase. Its recent investigation into Yuga Labs has affected the price of BAYC's native Apecoin token, which has recently fallen by 10% in value, trading at $4.71 at the time of publication.
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