U.S. Judge Tosses Investor Lawsuit Against Yuga Labs

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A U.S. judge has dismissed an investor lawsuit against Web3 firm Yuga Labs, ruling that Bored Ape Yacht Club (BAYC) NFTs, ApeCoin (APE), and other Yuga-issued digital assets do not meet the legal definition of securities.

Judge Fernando M. Olguin said the plaintiffs failed to demonstrate that Yuga’s NFTs satisfied the three prongs of the SEC’s Howey test for investment contracts. The case was originally filed in 2022.

Olguin noted that Yuga marketed the NFTs as digital collectibles with membership perks, making them “consumables rather than investment contracts.”