Beyond their aesthetic value, non-fungible tokens (NFT) have yet to find their actual function on the market. This is because the present trend of keeping and trading NFTs does not equate to another kind of money, nor do they resemble traditional investment vehicles such as equities.
The present situation
As BAYC inventor Yuga Labs is investigated by the SEC, ApeCoin (1) declines by over 10%. The Securities and Exchange Commission (SEC) is investigating potential violations of federal law involving assets. ApeCoin, the distribution of Bored Ape Yachts Club's native coin, is also being examined. APE has decreased by 9.66% over the past 24 hours as NFTs have been the SEC's new focus.
Did Yuga Labs make an error?
The Securities and Exchange Commission (SEC) intends to examine Yuga Labs (2), according to a report from Bloomberg on October 11. The SEC is assisting the creators of the Bored Ape Yacht Club NFT collection, one of the world's largest collections, in determining whether or not the selling of Yuga Labs' goods violates federal law.
The Commission will investigate the collection of assets supplied by Yuga Labs, including the NFTs, to determine whether or not they may be classified as stocks. If so, this would pave the way for several types of crypto regulation based on their utility. The SEC will also investigate how ApeCoin native tokens were issued to their respective holders.
However, the SEC has not found Yuga Labs in the wrong, and it may not even become a worry for the labs. Because crypto rules are still being formulated, the industry faces hurdles, and an investigation into an entity does not inevitably result in a negative outcome. However, the price of ApeCoin did not appear to reflect this.
How did this Impact Apecoin?
As soon as the news emerged, APE's price began to decline, and over the following few of hours, the cryptocurrency lost about 10% before rebounding. Around the time of writing, APE was spotted trading at $4.7, despite the absence of significant damage on the charts. Historically, day-to-day variations of up to 10% in APE's value have been commonplace. Tuesday's decline is not even the largest single-day decline over the past 30 days, making it another bad day for APE investors.