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NFT Updates: Yuga Labs Phases Out Support for Non-Royalty Platforms, South Korea Engages in NFT Talks with Gary Gensler

ByDayne Lee

Feb 29, 2024
NFT Updates: Yuga Labs Phases Out Support for Non-Royalty Platforms, South Korea Engages in NFT Talks with Gary Gensler

Yuga Labs, the powerhouse behind renowned Nonfungible Token (NFT) collections such as the Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC), is making a significant pivot in its marketplace affiliations. Announced on February 26, the company has decided to withdraw its collections from NFT marketplaces that fail to uphold creator royalties, emphasizing the importance of royalties in fostering creativity and innovation within the NFT space.

Yuga Labs Advocates for Creator Royalties

Yuga Labs’ decision to favor marketplaces that support creator royalties reflects a broader movement towards ensuring fair compensation for creators in the digital asset space. The move will affect several of Yuga’s collections, including those with built-in royalty filters such as Sewer Passes, HV-MTL, 10KTF, Otherside, and others. This policy change aligns with the ethos of a creator-led Web3, particularly highlighted by the launch of Magic Eden’s Ethereum-based marketplace, which enforces contractual royalties.

South Korea Seeks Clarity on NFT Classification

In parallel developments, South Korea’s financial regulators are preparing for discussions with Gary Gensler, Chair of the United States Securities and Exchange Commission, on the classification of NFTs as virtual assets. The talks, slated to begin in May, aim to address the current absence of a legal framework for NFTs in South Korea, where recent legislation has excluded NFTs from the virtual asset category due to perceived low market risks. These discussions could potentially reshape the regulatory landscape for NFTs in South Korea.

Legal Challenges in the NFT Space

The NFT ecosystem is not without its controversies, as demonstrated by the recent charges against a United States Air Force cyber analyst involved in an alleged NFT “rug pull” scheme. The analyst, alongside an accomplice, is accused of defrauding investors of at least $300,000 through three Solana-based NFT collections. This case underscores the legal and ethical challenges facing the rapidly evolving NFT market.

Summary of Recent NFT News

Yuga Labs Withdraws from Non-Royalty MarketsCollections to be listed only on platforms supporting creator royalties
South Korea’s Regulatory Discussions on NFTsTalks with SEC Chair Gensler to clarify NFT classification
Legal Action Against NFT “Rug Pull” SchemeAir Force analyst charged with fraud in NFT project
  • Key Takeaways from Yuga Labs Announcement:
    • Emphasis on supporting creator royalties in NFT marketplaces.
    • Specific collections affected by the new policy.
    • Alignment with Magic Eden’s marketplace launch.
  • Implications of South Korea’s NFT Discussions:
    • Potential for legal definition of NFTs as virtual assets.
    • Impact of regulatory clarity on NFT market in South Korea.
  • Understanding the NFT “Rug Pull” Charges:
    • Allegations of fraudulent activity in Solana-based NFT collections.
    • Legal consequences for involved parties.

The evolving landscape of NFTs continues to be shaped by pivotal decisions from industry leaders like Yuga Labs, regulatory discussions in jurisdictions like South Korea, and the ongoing challenges of maintaining integrity within the marketplace. As the digital asset space grows, these developments underscore the importance of creator rights, regulatory clarity, and ethical practices in ensuring the long-term viability and trustworthiness of NFTs.

Featured image credit: Timon via Adobe Stocks

Dayne Lee

With a foundation in financial day trading, I transitioned to my current role as an editor, where I prioritize accuracy and reader engagement in our content. I excel in collaborating with writers to ensure top-quality news coverage. This shift from finance to journalism has been both challenging and rewarding, driving my commitment to editorial excellence.