Overview

• U.S. District Judge Fernando M. Olguin threw out a 2022 investor lawsuit that sought to classify Yuga Labs’ Bored Ape Yacht Club NFTs and ApeCoin as unregistered securities.
• The ruling found the plaintiffs failed the Howey Test, including no common enterprise and no explicit promise of profits derived from Yuga’s efforts.
• Yuga’s marketing presented the tokens as digital collectibles and club memberships, not investment products, weakening claims of an investment contract.
• Legal observers say the decision bolsters the view that many NFTs are not securities, though projects offering revenue sharing or profit guarantees could face different outcomes.
• Regulatory scrutiny persists as the SEC pursues other NFT cases, and Yuga continues to litigate separate trademark issues that an appeals court returned for trial in July.