U.S. Judge Rules Bored Ape NFTs Not Securities in Major Win for Yuga Labs
A U.S. federal judge in California has dismissed a class-action lawsuit against Yuga Labs, the company behind the popular Bored Ape Yacht Club NFTs. The ruling is a significant victory for Yuga Labs in the ongoing debate over the security status of NFTs.
The judge, whose name was not disclosed, concluded that Bored Ape NFTs are not securities. This decision sets a precedent in the legal landscape of NFTs. The judge highlighted two key factors in their ruling. Firstly, Bored Ape buyers primarily use third-party marketplaces for transactions, reducing direct financial ties with Yuga Labs. Secondly, the creator royalties model weakens the financial connection between Yuga and NFT holders, distinguishing Bored Ape NFTs from other NFTs previously deemed securities.
Since their launch in 2021, Bored Ape Yacht Club NFTs have generated a staggering $7.2 billion in trading volume. Despite a decline in cultural relevance and value, the NFTs continue to attract significant interest and investment.
The dismissal of the lawsuit against Yuga Labs is a major legal win for the company. The ruling clarifies the security status of Bored Ape Yacht Club NFTs, providing a clearer path for the company and the wider NFT industry. The decision also underscores the importance of understanding the unique financial dynamics of NFTs in legal contexts.
