PANews reported on October 4 that according to Cointelegraph, a US judge dismissed investors' lawsuit against Web3 company Yuga Labs, ruling that the case failed to prove that NFT meets the legal definition of securities.

Judge Fernando M. Olguin ruled that the plaintiffs failed to demonstrate how Bored Ape Yacht Club (BAYC), ApeCoin, or other NFTs sold by Yuga met the three conditions 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 said Yuga Labs marketed its NFTs as digital collectibles and offered membership benefits to an exclusive club, making them consumer products rather than investment contracts. “The defendants’ promises that NFTs would generate future, rather than immediate, consumer benefits do not transform those benefits from being consumer products to being investments.”