The U.S. Securities and Exchange Commission has launched a probe into Yuga Labs, the creator of the world-famous Bored Ape Yacht Club NFT collection, to investigate whether the sales of its digital assets are in violation of federal law.

The key legal question at the heart of the matter, which the SEC has been investigating since March, is whether some of their digital assets qualify as securities, and hence should follow the same stock disclosure rules.

The SEC is also looking at the manner with which apeCoins, the Ethereum-based governance and utility tokens used within the APE ecosystem, were distributed to holders of Bored Ape Yacht Club, Mutant Ape Yacht Club and Bored Ape Kennel Club members.

First announced in March with the establishment of the community-driven ApeCoin DAO and the Ape Foundation, 62% of the fixed one billion supply of apeCoins was allocated to the ApeCoin community, 15% of which was airdropped to existing NFT holders.

Some were also allocated to Yuga Labs and the Jane Goodall Legacy Foundation, alongside launch contributors and the four founders of Bored Ape Yacht Club.

Because club membership NFTs offer similar perks to a traditional investment contract, the Bored Ape Yacht Club is said to have ‘distanced its NFT collection’ from the ApeDAO token launch in the press material, hoping it would not attract the attention of the SEC.

According to the Bloomberg report, Yuga Labs has not yet been accused of any wrongdoing so far, so the investigation may not necessarily lead to charges.

A Yuga Labs spokesperson commented: “It’s well-known that policymakers and regulators have sought to learn more about the novel world of Web3. We hope to partner with the rest of the industry and regulators to define and shape the burgeoning ecosystem. As a leader in the space, Yuga is committed to fully cooperating with any inquiries along the way.”