ApeCoin sinks by almost 10% as BAYC creator Yuga Labs falls under SEC's probe
- The Securities and Exchange Commission (SEC) is looking into assets that might be violating federal laws.
- ApeCoin, Bored Ape Yachts Club's native token's distribution, is also being looked into.
- APE has slipped by 9.66% in the span of 24 hours as NFTs became SEC's new target.
Non-fungible tokens (NFT) are yet to find their true purpose in the market beyond the aesthetic. This is because the current fad about holding and trading NFTs does not translate to being another form of currency, nor are they similar to traditional investment vehicles such as stocks.
Yuga Labs made no error?
According to a report from Bloomberg on October 11, the Securities and Exchange Commission (SEC) is looking to investigate the Yuga Labs. Creators of the Bored Ape Yacht Club NFT collection, one of the world's biggest collections ever, have the SEC behind them trying to understand whether or not the sale of Yuga Labs' offerings is violating federal law.
The Commission will be looking into the set of assets offered by Yuga Labs, including the NFTs and if or not these assets could be treated like stocks. If yes, this would open the doors for multiple forms of regulation on crypto based on their utility.
Beyond this, the native token ApeCoin will also be looked into by the SEC in order to understand how they were distributed among the holders.
However, as of now, Yuga Labs has not been found in the wrong by the SEC, and it may not even become a cause of concern for the labs. Since crypto regulations are still being shaped, it is finding challenges as such, and a probe into an organization does not necessarily lead to an unfavorable conclusion.
The price of ApeCoin, although, did not seem to agree with that.
APE falls down
Just as the news broke out, APE's price began falling as well, and in the next couple of hours, the altcoin was down by almost 10% before recovering slightly. At the time of writing, APE was seen trading at $4.7, although with no severe damage observed on the charts.
APE's volatility is one of the biggest driving factors of its value, and in the past, single-day fluctuations up to 10% have been a usual occurrence. Tuesday's drop is not even the highest single-day drop in the last 30 days, making it just another day in the life of APE holders.
Author
Aaryamann Shrivastava
FXStreet
Aaryamann Shrivastava is a Cryptocurrency journalist and market analyst with over 1,000 articles under his name. Graduated with an Honours in Journalism, he has been part of the crypto industry for more than a year now.
