Bored Ape NFTs Are Not Securities, Court Rules in Landmark Decision

A federal judge in California has dismissed a class-action lawsuit against Yuga Labs, the company behind the Bored Ape Yacht Club (BAYC) NFT collection, ruling that these NFTs do not constitute securities. Judge Fernando M. Olguin indicated that Bored Ape NFTs did not meet key criteria for securities, notably due to their sale on third-party marketplaces such as OpenSea, instead of via the issuing marketplace, and the absence of a necessary ‘common enterprise’ connection identified in other cases involving NFTs. Yuga Labs' collection of royalties on sales pointed to a decoupling of assets from obligations typical of securities. Despite this significant ruling, the market value of Bored Apes remains below historical peaks, with their floor price having significantly declined since its high in 2022. The U.S. Securities and Exchange Commission has also recently closed its investigation into Yuga Labs without taking enforcement action, marking a notable period of relief for the company in its legal battles regarding NFT classification.

Source 🔗