Court Rules Bored Ape NFTs are Not Securities

Bored Ape NFTs Are Not Securities, Court Rules in Landmark Decision

A federal judge in California has tossed out a class-action lawsuit against Yuga Labs, creator of the once-dominant Bored Ape Yacht Club NFT collection, ruling that the digital collectibles cannot be considered securities.

The Los Angeles-based judge, Fernando M. Olguin—who was appointed to the bench in 2013 by former president Barack Obama—ruled Thursday that Bored Ape NFTs fail to meet several criteria of the test used to determine the security status of financial transactions.

Elon Musk cannot move SEC’s Twitter lawsuit out of Washington DC, judge rules

Elon Musk failed to persuade a Washington, D.C. federal judge to move a Securities and Exchange Commission lawsuit over his late disclosure of his growing Twitter stake to Texas, after saying he was too busy to defend himself in the nation’s capital.

U.S. District Judge Sparkle Sooknanan said on Thursday she “takes Mr. Musk’s convenience seriously,” but the world’s richest person has “considerable means” and spends at least 40% of his time outside Texas.

“Indeed,” she wrote, “Mr. Musk’s brief itself indicates that he has spent substantial time here this year,” when he ran the Department of Government Efficiency.

Sooknanan also said Texas judges have bigger caseloads than in her court, and she could proceed with “reasonable alacrity.”

In seeking to move the case, Musk said he was an “incredibly busy individual” who works 80-plus hour weeks and often sleeps in the office or factory, and that litigating in Washington would impose “substantial burdens.” […]

Sooknanan rejected Musk’s alternative proposal to move the SEC case to Manhattan, where former Twitter shareholders are suing him.

Tokenization

My theory of “tokenization” — turning various financial or physical assets into crypto tokens that can trade on the blockchain — is that most people who talk about tokenization pretend that it is a computer technology, but really it’s a regulatory technology. When people say stuff like “we should tokenize real estate so that people can buy and sell fractional shares of buildings” or “we should tokenize private company stocks so that ordinary investors can buy shares of OpenAI,” they want you to hear “this is a technological breakthrough that will finally allow trading of these assets,” but that can’t be true. There have, for decades, been real estate investment trusts that allow people to buy fractional shares of (portfolios of) buildings. There have, for centuries, been stock markets that allow people to buy shares of companies.

It’s just that, in the US in 2025, there are rules — securities laws — about how you can offer shares of companies or buildings to public investors. Those shares are “securities,” and they are subject to a lot of disclosure obligations, and a lot of people would prefer not to comply with those obligations, sometimes for reasons of cost (the rules are quite burdensome) and sometimes for reasons of, you know, fraud. “Tokenization” carries the promise of starting over. A token, the theory goes, is an entirely new category, not a security, so it’s not subject to securities law. So maybe you can sell shares of buildings or OpenAI to the public without disclosure, if you call them tokens.

It has always seemed to me that this theory is completely wrong, and that a “tokenized” share of a company or building obviously is a security. This was also the opinion of the US Securities and Exchange Commission until recently. Now, uh, maybe not. So we are in a boom for tokenization, or at least for talking about tokenization.