California Judge Dismisses Bored Ape NFT Lawsuit, Rules They're Not Securities
A California judge has dismissed a class-action lawsuit against Yuga Labs, ruling that Bored Ape Yacht Club NFTs are not securities. This decision comes amidst a legal standoff between Yuga Labs and the federal government over the security status of NFTs.
The judge noted key differences between Bored Ape NFTs and other digital assets, stating that buyers used third-party marketplaces and that creator royalties weakened financial ties between Yuga Labs and holders. This ruling contrasts with the SEC's previous arguments that creator royalties indicated an asset was a security.
Despite the ruling, Bored Ape NFTs' floor price remains significantly down, currently at $37,337, a 90% drop from its peak. Yuga Labs, however, collects a royalty fee on every Bored Ape sale, suggesting a decoupling of buyers' fortunes from the company's. Since launching in 2021, Bored Ape NFTs have seen $7.2 billion worth of trading volume.
The dismissal of the lawsuit is a major legal win for Yuga Labs, but Bored Ape prices continue to languish far below their peak. The ruling may provide clarity for the NFT industry, though the SEC's stance under the current administration remains unclear.
