The SEC is probing Yuga Labs, the creator of the Bored Ape Yacht Club NFT collection, over whether sales of its digital assets violate federal law, according to a report from Bloomberg, citing an unnamed source close to the matter.

At issue is whether some of Yuga’s NFTs are closer to stocks and thus should follow the same disclosure rules.

The SEC is also looking into how ApeCoins were distributed to holders of Bored Ape Yacht Club and related NFTs.

ApeCoin was falling almost 8% following the publication of Bloomberg’s story.

Yuga Labs did not immediately respond to a request for comment.

This is a developing story and will be updated.

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