US judge dismisses lawsuit against Yuga Labs, rules that ApeCoin and BAYC NFT do not constitute securities

ChainCatcher News, according to Cointelegraph, a US judge has dismissed the lawsuit filed by investors against Web3 company Yuga Labs, ruling that the case failed to prove that NFTs meet the legal definition of securities.

Judge Fernando M. Olguin ruled that the plaintiffs failed to demonstrate how Bored Ape Yacht Club (BAYC), ApeCoin, or other NFTs sold by Yuga meet the three criteria of the Howey Test. The Howey Test is the standard used by the US SEC to determine whether a transaction constitutes an investment contract. The lawsuit was originally filed in 2022. Olguin stated that Yuga Labs marketed its NFTs as digital collectibles and provided membership benefits to exclusive clubs, making them consumer goods rather than investment contracts. "The defendants promised that NFTs would bring future rather than immediate consumption benefits, but this does not transform these benefits from a consumption nature to an investment nature."