NFT: Has Yuga Labs deceived its investors? Class action that can hurt

The Securities and Exchange Commission in dilemmaYoga Labs Is one of the greatest successes in the field of irreplaceable tokens, the famous NFT. Bored Ape and CryptoPunks combinations drive counters crazy and So greedy. But after the crash of the cryptocurrency market and thus the price of these NFTs, some owners consider themselves oppressed And want to do battle with the parent company. a law office Take up the matter and consider a group trial. But the SEC policeman is reluctant to position himself. Challenges and prospects.

Investors may have been cheated by Yuga Labs

Scott + Scott It is an international law firm with offices in the United States and Europe. Its teams specialize in consumer protectionor shareholder rights or in securities disputes. On July 12, they posted on their blog an invitation for testimonials to look into a file working class against Yuga Labs.

The company is hitting hard on the American startup and the words chosen are clear. This is an excerpt:

“Yuga Labs inappropriately encouraged the community to buy Bored Ape Yacht Club and the APE token associated with the project. (…) Promoters and celebrities were used to inflate the price to unsuspecting investors. In the end, retail investors were left with tokens that fell more than 87% below the inflated price. On April 28, 2022. »

In fact, it is not only about NFT But also tokens Monkey. On the one hand, so there will be a community Promotes Images and icons, raising the price and reselling everything on the back of a poor community of buyers naive. the famous pumping and discharging, a classic movement in cryptography. But the situation is far from simple.

First of all, it isn’t Yoga Labs Who decided to issue tokens. It is rather a DAO, that is, the independent organization of NFT owners. So it is difficult to accuse him. Also, regarding the pump and dump charge, no one left the project with the exit. The price of the token came after the global drop in the markets. So it will be difficult fix something in this direction. But the biggest problem in this case will be persuasion dry She must intervene.

Bored monkey manager mocks people who complain after ‘buying the top’ – Source: Twitter

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But the reality is more complicated for the SEC

Actually, what is NFT? If it is a digital work of art, the SEC has no authority over it. Brian Firea professor of law at the University of Kentucky, explains why:

“I see there is very little chance that the Securities and Exchange Commission will want to get into this and… characterize this [les NFT] as a guarantee. (…) I think they will resist tooth and nail. (…) Because that will open up a Pandora’s box and force them to organize all kinds of other things that they don’t want to organize. »

The Securities and Exchange Commission actually has no desire to to organize art market and don’t plan to start with NFTs! If you bought a painting hoping for capital gains, would you file a complaint if the painter’s price went down? On the NFT side, there’s really no chance of seeing any of them Procedure succeed. And on the APE tokens side, we’re also going in circles. Brian Fire continues:

“The strange thing is how can you trade inside unless you are doing it with something that is a stock traded security?”

In short, in order to be able Sue Yuga Labsthe SEC must first Site on the nature icons Monkey and maybe NFT. It was decided to include them in the security category, which it has been rejecting for years. It is likely that the Securities and Exchange Commission Press the key » and use terms such as Electronic fraud and money laundering » to describe the facts. But, one day, it will be necessary to build a regulatory framework for its undefined financial goals, because The Fashion doesn’t seem ready to pass up.

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