SEC charges Impact Theory with unregistered securities offering in NFT format

2023/08/28 15:25

The SEC has accused Impact Theory, a media and entertainment company based in Los Angeles, of conducting unregistered cryptocurrency securities offerings in the form of NFTs. Through this offering, Impact Theory raised approximately $30 million from hundreds of investors, including investors from across the United States. According to SEC documents, from October to December 2021, Impact Theory offered and sold three NFTs called Founder's Keys, which Impact Theory referred to as Legends, Heroes, and Ruthless. The documents indicate that Impact Theory encouraged potential investors to purchase Founder's Keys as an investment in the company and stated that investors would profit from the purchase if Impact Theory's efforts were successful. Additionally, Impact Theory emphasized that it is "trying to build the next Disney" and that if successful, it would bring "enormous value" to the primary purchasers of the founders' keys. The order found 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 unregistered cryptocurrency securities to the public, and the offering was not exempt from registration.

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