Yuga Labs had been under SEC scrutiny since 2022 to determine whether some tokens, such as fractional NFTs, were securities under U.S. law.

Quotes that support claims

"The regulator’s probe started under former Chair Gary Gensler and was part of a wider investigation into NFTs — which included probes on NFT creators and marketplaces — to see if some tokens, such as fractional NFTs, were securities."