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Apecoin Tanks 8% as SEC Taps Creator over Federal Law Violation Concerns

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VOC, Voice of Crypto, ApeCoin (APE)

This time, the Securities and Exchange Commission has focused on ApeCoin and Yuga Labs, the startup behind the popular cryptocurrency and NFT collection.

As a direct result, the crypto market hasn’t been favorable to ApeCoin over the last 24 hours. On the last day, the price of ApeCoin tanked 8.3% and appeared to have more room for movement to the downside.

Why Did SEC Launch This Probe

The SEC is known for going after and suing several cryptocurrency platforms they claim violate Federal Laws. The most famous of these cases is their ongoing court case against Ripple Labs.

Recently, the SEC launched a legal probe into Yuga Labs. According to the Securities and Exchange Commission, there is a need to investigate the “affinity” of the digital assets minted, promoted, and sold by Yuga Labs. The SEC claims that these assets and NFTs are more akin to stocks, meaning that Yuga Labs may violate several US Federal Laws.

According to sources, this investigation may not stop only at the Ape NFTs sold by Yuga Labs. APE, the native cryptocurrency of the ApeCoin DAO governance model, may also be up for scrutiny.

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Yuga Labs’ Apecoin Defence

So far, Yuga Labs has maintained that it is not the creator of ApeCoin.

This seems to be true because, according to the official ApeCoin Website, the Ape Foundation is only the “steward” of ApeCoin, which was made to be the native cryptocurrency of the Ape ecosystem, marketplace, and its apps.

In a statement made to a journalist from Bloomberg, a Yuga Labs representative has noted that several policymakers and regulatory bodies have sought to learn more about web3 ecosystems and that Yuga Labs aims to partner with the rest of the industry. The representative also adds that Yuga Labs will fully cooperate with any inquiries along the way.

Under the leadership of Gary Gensler (current SEC chair), the agency has been criticized for going after several crypto-related activities, with Gensler terming “most cryptocurrencies” as “potential securities.” Bitcoin, according to the SEC chair, is the only exception.

It is important to note that while this probe against Yuga Labs can escalate into a legal case, not every probe eventually leads to legal action.

ApeCoin Price Action

APE currently trades at $4.69 after the dip in the last 24 hours. As illustrated below, the price action on APE dipped suddenly after the news of the SEC probe broke.

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Chart showing dip on $APE, and attempts to reclaim the 50 and 20-period simple moving averages

Chart showing dip on APE and attempts to reclaim the 50 and 20-period simple moving averages | Source: Tradingview

The RSI on the hourly chart showed extremely oversold conditions yesterday and has now started to correct itself.

So far, the price of APE has managed to move above the 50-period hourly SMA (blue line) and is now targeting the 20-hour SMA (yellow line) before a significant correction and a move to the upside.

Chart showing price dip on APE, and increase in trading volume

Chart showing price dip on APE, and increase in trading volume | Source: Tradingview

It is interesting to note that while the price of APE experienced a massive dip, the trading volume on the cryptocurrency also appears to have doubled, reaching a high of $312 million.

 

 

 

Disclaimer: The author’s comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR  (do your own research)

 

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Adekunle Joshua is a cryptocurrency writer. He has a deep understanding of the technology and how it can be used to improve the world. James is a strong advocate for using cryptocurrency to make the world a better place. He wants to help people understand the technology and use it to improve their lives.

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