The NFT space is now accustomed to novel use cases and new project launches on a near daily basis. From NFTs involving real estate, to property in the metaverse, to NFT funds, innovation is the name of the game. But until a few days ago, we had not seen a corporate-style acquisition in the NFT space. This news is another reminder that technological innovation continues to outpace regulatory guidance.
On March 11, 2022, Yuga Labs, the creator of the famous Bored Ape Yacht Club (“BAYC”) NFT collection, announced that it had acquired the intellectual property rights to two other blue chip NFT collections owned by Larva Labs. Yuga Labs acquired the intellectual property rights to the CryptoPunks and Meebits NFT collections in a blockbuster deal, along with 423 CryptoPunk NFTs.
CryptoPunks, a collection of 10,000 unique pixelated digital images of punkish characters, is one of the earliest NFT projects on the Ethereum blockchain, and one of the most valuable. BAYC is also a digital image NFT collection depicting cartoon images of apes with different characteristics and accessories, each in a unique state of “boredom.” Ownership of a BAYC NFT also gives the holder access to the BAYC community and a variety of perks associated with being a member of the club.
In the world of NFT-based art collections, Yuga Labs’s purchase of CryptoPunks and LarvaLabs’s IP associated with that project might be seen as ground-breaking as if Apple had acquired Microsoft in the 1990’s.
Yuga Labs reportedly purchased the copyright to the art used in CryptoPunks which was previously owned and controlled by LarvaLabs. In contrast to LarvaLabs’s prior approach of restricting use of the IP rights associated with the CryptoPunks NFTs, Yuga Labs announced that it was “giving full commercial rights to the NFT holders. Just like we did for BAYC and MAYC owners.” If Yuga Labs follows through with this promise, owners of CryptoPunks may now have the commercial rights to use their NFT for things like derivative projects, marketing, and a number of other uses.
Right on the heels of this acquisition, it was also announced that a cryptocurrency associated with the BAYC was going to be issued -- ApeCoin ($APE). This newly created cryptocurrency describes itself as “a token for culture, gaming, and commerce used to empower a decentralized community building at the forefront of web3.” Although the coin is linked to Yuga Labs’s BAYC project, ApeCoin was officially released by ApeCoin DAO, a so called “decentralized autonomous organization.” The link between the two organizations is apparent, as Yuga Labs Tweeted “we’re adopting ApeCoin as the primary token for the Bored Ape Yacht Club ecosystem as well as future Yuga products and services.”
ApeCoin was initially issued (or “airdropped”) to owners of the BAYC NFT collection, and several related NFT collections. This means that NFT holders could claim a predetermined number of ApeCoins simply by owning the NFT. But just a day after the coin...
Are ApeCoin BAYC Cryptocurrency Covered by SEC? - The National Law Review
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