A U.S. judge dismissed a lawsuit against Yuga Labs, ruling that ApeCoin and BAYC NFTs do not constitute securities

ChainCatcher news, according to Cointelegraph, a U.S. judge has dismissed a lawsuit by investors against the 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 did not demonstrate how the Bored Ape Yacht Club (BAYC), ApeCoin, or other NFTs sold by Yuga met the three criteria of the Howey test. The Howey test is the standard used by the U.S. 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 an exclusive club, making them consumer goods rather than investment contracts. "The defendants promised that NFTs would yield future rather than immediate consumer benefits, but this does not transform those benefits from a consumer nature to an investment nature."