SEC accuses Impact Theory of conducting unregistered securities offering in the form of NFTs.

BlockBeats News, August 28th: The US Securities and Exchange Commission (SEC) has charged Impact Theory, LLC, a media and entertainment company based in Los Angeles, with the unregistered issuance of encrypted securities in the form of so-called NFTs. Through this issuance, Impact Theory raised approximately $30 million from hundreds of investors across the United States. According to the SEC's order, from October to December 2021, Impact Theory offered and sold three tiers of NFTs called Founder's Keys, which it referred to as "legendary," "heroic," and "relentless." The order found that Impact Theory encouraged potential investors to view the purchase of Founder's Keys as an investment in the company, and noted that investors would profit from the purchase if Impact Theory's efforts were successful. In addition, Impact Theory emphasized that it was "trying to build the next Disney" and that if successful, it would bring "enormous value" to the purchasers of Founder's Keys. The order determined that the NFTs offered and sold to investors were investment contracts and therefore securities. As a result, Impact Theory violated federal securities laws by issuing and selling these encrypted securities to the public in an unregistered manner. Without admitting or denying the SEC's findings, Impact Theory agreed to a cease-and-desist order, which found that it violated the registration provisions of the Securities Act of 1933, and ordered it to pay over $6.1 million in disgorgement, prejudgment interest, and civil penalties. The order also established a fair fund to return the payments made by victim investors for the purchase of NFTs. Impact Theory agreed to destroy all Founder's Keys it owns or controls, post an order notice on its website and social media channels, and eliminate any royalties it may receive from future secondary market transactions involving Founder's Keys.