The US judge dismissed the investor’s lawsuit against Web3 Yuga Labs, ruling that the case has not shown that tokens (NFT) (NFTS) meets the legal definition of securities.

Judge Fernando M. Olguin he ruled The plaintiffs did not show how the bored Monkey Yacht (Bayc), Apecoin (APE) or other NFT club sold by YUGA met the three conditions of the Howeya test, the standard used by the Security and Stock Committee (SEC) to determine whether the transaction qualifies as an investment agreement. The claim was originally filed in 2022.

Olguin said that Yuba Labs sold his NFT as digital collector’s collector’s with member benefits, which makes them consumables, not investment contracts. He wrote:

“The fact that the accused promised that the NFT grant the future, unlike immediate consumer benefits, does not transfer these benefits from consumption to investment from nature.”

The judge also said that the plaintiffs did not show that the bored monkey yacht club and other NFT collections launched by Yuga are a “joint undertaking” with the expectation of profits generated by others, adding legal precedent that most digital assets are not securities.

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No common enterprise with a clear expectation of profit

NFT, which trade in public blockchain networks, did not establish a continuous and dependent financial relationship between the buyer and Yuga laboratories and do not qualify as a “joint enterprise” as part of the Howey test, said Olguin.

Investors who bought NFT from the company paid Yuga fee, which was independent of NFT prices, consensistic lawyer Bill Hughes wrote on X.

Finally, Olguin ruled that Yuga laboratories did not make clear promises of profits to potential NFT buyers and that the road map of the project did not meet the conditions under the profit waiting test.

“Statements regarding the inseparable or internal value of the product are not necessarily profit statements,” said Olguin.

“Statements on NFT prices and trade volumes are a slightly closer call, but even then the same statements do not determine the expectations of profit,” he added.

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