Back
Court Finds Plaintiffs Did Not Prove Bored Ape NFTs Are Investment Contracts

Court Finds Plaintiffs Did Not Prove Bored Ape NFTs Are Investment Contracts

A U.S. court dismisses a lawsuit against Yuga Labs, ruling that the Bored Ape Yacht Club NFTs do not meet the SEC's Howey Test for investment contracts.

APE

Fact Check
Multiple recent news sources (Cointelegraph, Yahoo Finance, Coincentral, CoinPedia) from the last 48 hours corroborate that a federal judge, Fernando M. Olguin, dismissed a class-action lawsuit against Yuga Labs. The sources explicitly state the ruling was based on the plaintiffs' failure to demonstrate or prove that Bored Ape NFTs qualify as securities. Evidence that appears to contradict this (Digital Music News) is dated earlier and reports on a previous stage of the same lawsuit before the dismissal.
    Reference: 123
Summary

A U.S. judge dismissed a lawsuit against Yuga Labs, ruling that its Bored Ape Yacht Club NFTs, including ApeCoin, are not investment contracts under U.S. securities law. The court found that the NFTs were marketed as digital collectibles with membership benefits, not as securities. The case, filed in 2022, failed to meet the SEC’s Howey Test criteria, leading to the dismissal of the claim.

Terms & Concepts
  • Bored Ape Yacht Club (BAYC): A popular NFT collection featuring unique digital ape illustrations, often serving as status symbols in the crypto community.
  • Non-Fungible Token (NFT): A blockchain-based digital asset representing ownership of a unique item, such as art, music, or virtual collectibles.
  • Howey Test: A legal standard used by the SEC to determine whether a transaction qualifies as an investment contract, based on three specific criteria.