Yuga Labs, the $4 billion company behind popular NFT collection Bored Ape Yacht Club (BAYC), generated may find itself in the courtroom.
Law firm Scott+Scott has announced that it is currently organizing a class-action suit against Yuga Labs.
The lawsuit will allege that Yuga falsely promoted Bored Ape NFTs and ApeCoin, the collection’s native Ethereum token, as securities with guaranteed returns.
Bored Ape NFTs and Apecoin have sank in value over the last three months.
Scott+Scott is seeking plaintiffs who suffered losses in association with the purchase of Yuga-backed NFTs and tokens from April to June.
Should a court find the BAYC NFTs to be securities, then Yuga Labs would have failed to make the necessary disclosure and registration obligations that come with offering securities.
ApeCoin, a cryptocurrency launched by Yuga in March, grants holders the ability to vote on the governance proposals of ApeCoin DAO, a decentralized autonomous organization that makes decisions related to the Bored Ape Yacht Club ecosystem.
The coin’s value tends to fluctuate with the fortunes of BAYC and Yuga Labs.
Despite the U.S government largely refraining from labeling NFTs as securities, last month the Department of Justice charged a former executive at NFT marketplace OpenSea with insider trading.
The charges allege that the executive made trades informed by insider knowledge about which NFT collections would be featured on OpenSea’s homepage.