Yuga Labs Suit Dismissed: NFTs & ApeCoin Aren’t Securities

Published: 2025-10-06 07:00:13 |

A U.S. federal judge has dismissed a 2022 lawsuit against Web3 developer Yuga Labs, ruling that its Bored Ape Yacht Club (BAYC) NFTs and ApeCoin tokens do not qualify as securities under the SEC’s Howey Test. The court found no evidence of a shared enterprise or profit expectations tied to Yuga Labs’ ongoing efforts. Instead, BAYC NFTs were marketed as digital collectibles with membership perks, not as investment contracts promising returns. The ruling clarifies that roadmap milestones and future utility statements alone do not constitute a securities offering. By reducing legal uncertainty around consumer-focused NFTs, the decision may stabilize market perceptions and support trading activity in top NFT projects. However, the SEC continues to monitor projects with revenue-sharing or promotional payouts.

Bullish

The dismissal reduces legal risk for prominent NFT projects and clarifies that most consumer-focused NFTs and ApeCoin do not meet securities criteria. By lowering uncertainty, it may boost trader confidence and support both short-term market stability and long-term adoption in the NFT sector. Continued SEC scrutiny of revenue-sharing models remains a caution, but the overall effect is positive for NFT valuations and trading activity.