Catenaa, Friday, October 10, 2025- A federal judge has dismissed a lawsuit against Yuga Labs, the creator of Bored Ape Yacht Club (BAYC), ruling that its NFTs and ApeCoin do not qualify as securities under US law.
The court found no common enterprise or profit expectation linking buyers to the company, setting a major precedent for digital collectibles.
Judge Fernando M. Olguin applied the Howey Test and determined that BAYC NFTs were marketed as digital collectibles providing membership benefits rather than investment contracts promising returns.
The ruling emphasized that tradable NFTs on public blockchains, with royalties independent of pricing, fail to establish the “common enterprise” required for securities classification.
Legal experts said the decision strengthens the argument that most NFTs designed for consumer enjoyment fall outside existing US securities regulations.
The dismissal follows years of debate over whether non-fungible tokens should be regulated as investment vehicles. Plaintiffs had alleged that buyers were misled into expecting profits, but the court ruled that statements about value or future plans do not constitute promises of profit.
In a related development, Nike and StockX settled a nearly three-year NFT trademark dispute over sneaker-linked digital collectibles.
The settlement cancels an upcoming jury trial and ends claims with prejudice, reflecting broader caution in the market as companies reassess their NFT strategies.
