Bored Apes Are Under SEC Investigation, NFT Market Braces For Impact

The SEC is investing Yuga Labs, the company behind Bored Ape Yacht Club NFTs, according to reporting from Bloomberg. So far, the investigation seems more exploratory than aggressive: the SEC wants to know if NFTs should be treated and regulated as stocks, rather than as commodities. Right now, a Bored Ape is legally classified as an asset, the way a painting or a piece of furniture might be, but the SEC believes it might actually be more like a security, which means people are buying and selling them as investments.

pic.twitter.com/ICZcQG0wgK

— ChromeDragon (@davtheunknown) October 11, 2022

If the SEC concludes that a Bored Ape is a security, then there will be new rules surrounding the way the Apes are bought and sold, in order to prevent scams. There will have to be more transparency and public disclosures, along with a wider regulatory framework. The scrutiny of Yuga Labs could also lead to other outcomes: if there is something hidden at Yuga Labs, it’s very possible the SEC would find it. But as it stands, the investigation is nothing unexpected.

If you're freaking out about the SEC investigating @yugalabs and $APE, don't.

Remember – it is their literal job to investigate if things are and are not securities. This was bound to happen. Yuga, I assume, structured it with security laws in mind. Investigation will pass.

— camol (@camolNFT) October 11, 2022

The response online varied according to what people thought about Bored Apes. Some, who have been long-time supporters of NFTs, posted about their loyalty to Yuga Labs and the Web3 project.

if the SEC investigates yuga and determines that no laws are being violated pic.twitter.com/YmgGhyUId2

— belfortnft.eth 🫡 (@BelfortNFT) October 11, 2022

Others made fun of NFT loyalists, mocking them along familiar lines: in memes, critics implied supporters of the Apes were derpy and deluded.

these people could be having their limbs actively sawed off by wylie aronow himself and theyd still be "bullish on yuga labs" pic.twitter.com/4YU5ZX2V9H

— RYDER-RIPPS.ETH 🔜 (@ryder_ripps) October 11, 2022

Fuck the SEC they’re just gonna moon my bags so hard. They’re fucking with the wrong ones bro you don’t think Yuga lawyers got this no cap? Our floor is going to FLY pic.twitter.com/FOajnrjmTU

— gucciprayers (@gucciprayers) October 11, 2022

The complicated legal situation also excited some memers. A few of them tied it to ongoing drama between Yuga Labs and artist Ryder Ripps, who argues the whole thing is a 4chan troll.

YugaLabs suing ryder_ripps</a> &amp; <a href="https://twitter.com/Pauly0x?ref_src=twsrc%5Etfw">Pauly0x for copyright infringement

SEC opens an investigation into @yugalabs for possibly releasing an unregistered security via APE COIN pic.twitter.com/O5UYvftZ5A

— TheUberhuman.eth (@TheUberhuman) October 11, 2022

Some turned their fire towards the SEC, criticizing the federal watchdog for chasing after NFTs instead of other targets. Many of these tweets argued in favor of Yuga Labs from a populist standpoint, arguing that the alternative financial system they seem to promise is better for regular people than the existing one.

yuga labs: literally turns a bunch of regular everyday people into millionaires

SEC: we need to protect Americans from this!!!!

— DANIEL GOT HITS | 260.eth (@danielgothits) October 11, 2022

come on SEC Yuga to be kidding me 🤦‍♂️ pic.twitter.com/eGAz6rSGdS

— NFT POWER RANKINGS🥇 (@nftpowerranking) October 11, 2022

Going after Yuga Labs instead of the likes of Nancy Pelosi, Citadel, and Blackrock just shows the world that SEC doesn’t care about justice, consumer protection, or financial regulation.

SEC cares about asserting dominance and ensuring TradFi continues to maintain full control.

— Satvik Sethi (@sxtvik) October 11, 2022

A number of investors thought about ditching their Apes.

"the sec and fbi are investigating yuga for th…"

- nft mfers: pic.twitter.com/otiNbLlNUj

— marto (@marto_gm) October 11, 2022

Others trusted the plan, seeing it as the latest chapter in an ongoing ape saga.

About time Yuga rolled out this part of the roadmap pic.twitter.com/vxAXAumT55

— Cirrus (@CirrusNFT) October 11, 2022