ApeCoin Crashes 7% Following SEC Investigation Against Yuga Labs

ApeCoin (APE) is on a downward trend as the U.S. Securities and Exchange Commission (SEC) released an investigation into parent company Yuga Labs. Regulators are investigating creators of popular non-fungible token (NFT) collections, such as Bored Ape Yacht Club (BAYC), for possible violations of securities laws.

According to a Bloomberg report, the European Commission will investigate the “affinity” of digital assets created and facilitated by Yuga Labs and the potential for these NFTs to be “equity-like.” This makes the cryptocurrency company suspect of violating U.S. federal law.

The report cites sources familiar with the matter, and the individual also claims that the investigation extends to ApeCoin, the native token that supports the ApeCoin DAO governance model, giving users access to the staking mechanism. offers. Through this token, the owner can make decisions related to the project.

APE was launched as part of an initiative to give BAYC investors more voice and power over their projects via the ApeCoin DAO. Through social media, many users have expressed concerns about the future of his DAO and the staking mechanism that has led to the token’s price crash.

In a statement to Bloomberg, a Yuga Labs representative said:

It’s no secret that policy makers and regulators want to know more about the new world of web3. We look forward to working with other industries and regulators to define and shape a rapidly growing ecosystem. As a leader in this field, Yuga is committed to fully cooperating with all inquiries.

ApeCoin and Yuga Labs Under SEC Scrutiny

The investigation may escalate from the commission against Yuga Labs, including pursuing a lawsuit. However, not all investigations lead to legal action.

Under the leadership of Gary Gensler, the SEC is targeting crypto-related activity. The current SEC chair has compared cryptocurrencies to the “Wild West” and classifies “most cryptocurrencies” as potential securities. The only exception Gensler is willing to publicly admit is Bitcoin.

Over the past few months, there has been an increase in SEC enforcement actions against crypto projects. The commission appears to be targeting major and well-known organizations such as Yuga Labs and its projects his BAYC and ApeCoin, as well as his Kim Kardashian socialite.

Their biggest case right now concerns payment company Ripple and its alleged offering of XRP, an unregulated security. According to a FOX report, some of his SEC staff believe the commission is pushing the case because of Gary’s personal interests in Gensler and his desire to be named Treasury Secretary. increase.

The commission, which is allegedly understaffed and disagrees with Gensler’s management style and complaints about long hours, is driving many to seek work elsewhere. There is no statement from Yuga Labs regarding this investigation.

Scoop (1/3): @SEC_ Enforcement staff complaining @GaryGensler Protocol violation due to hype @Kim Kardashian payment, emergence @CNBC People with first-hand knowledge communicate within minutes of a case being announced @fox businessThey call it a “publicity stunt”

— Charles Gasparino (@CGasparino) October 5, 2022