Yuga Labs is a non-fungible token (NFT) company that distributes NFTs.
The accusation centers around the acquisition of certain “Meebits” NFTs prior to Yuga Labs’ purchase of two NFT collections. According to reported data from a blockchain security firm, PeckShield, between March 5 and March 11, 14 suspicious addresses made more than 150 “Meebits” NFT purchases before Yuga Labs announced it would purchase the rights to Meebits and other NFTs, substantially inflating the value of those NFTs.
The SEC does not currently regulate NFTs, so there is likely no claim for insider trading or securities fraud, but Yuga Labs investors may have claims for market manipulation and common law fraud. A similar lawsuit was filed in 2020 against cryptocurrency exchange Bitfinex for market manipulation around their issuing of cryptocurrencies to inflate the overall cryptocurrency market price.