SEC charges Impact Theory for unregistered offering of NFTs

Impact Theory, LLC, a media and entertainment company based in Los Angeles, has been charged by the Securities and Exchange Commission (SEC) for conducting an unregistered offering of crypto asset securities in the form of non-fungible tokens (NFTs). The company raised around $30 million from investors through the offering, which involved three tiers of NFTs called Founder’s Keys. Impact Theory promoted the purchase of these NFTs as an investment into the business, claiming that investors would profit if the company was successful. The SEC deemed these NFTs as securities and found Impact Theory in violation of securities laws. As a result, Impact Theory agreed to a cease-and-desist order and will pay over $6.1 million in disgorgement, prejudgment interest, and a civil penalty. The company will also establish a Fair Fund to return money to injured investors and destroy all Founder’s Keys in its possession.

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