SEC Goes After an NFT Project for the First Time
Login

SEC Goes After an NFT Project for the First Time

Estimated Reading Time: 3 minutes
Article Rating:
Based on 1 vote
Login to rate this article.

Azeez Mustapha

Updated:


In a groundbreaking move, the US Securities and Exchange Commission (SEC) has taken its first-ever enforcement action against a non-fungible token (NFT) project, alleging the sale of unregistered securities.

The SEC’s scrutiny has fallen upon Impact Theory, a media and entertainment company based in the vibrant city of Los Angeles. In 2021, they raised an impressive $30 million by selling NFTs named Founder’s Keys.

SEC charges Impact Theory
Source: SEC

Impact Theory pitched their endeavor as “the next Disney” and made bold claims that the NFTs would appreciate in value if their ambitious vision was realized. Moreover, they pledged to reinvest the proceeds from the sales to fuel their business growth and future projects.

The SEC’s contention is that these declarations formed an integral part of the NFT’s investment contracts, a type of security that mandates registration with the SEC or adherence to an exemption. In their view, Impact Theory transgressed federal securities laws by offering and selling these NFTs without the requisite registration or exemption.

Impact Theory Settles with the SEC

In a move designed to resolve the matter without admitting guilt, Impact Theory has agreed to a cease-and-desist order. The company has also agreed to pay penalties amounting to $6.1 million and committed to destroying all the NFTs under their control. Notably, they have waived any royalties they may have received from secondary market NFT sales.

This significant development serves as a stark warning to the wider NFT community, signaling the SEC’s heightened vigilance in this burgeoning market. The SEC, in its commitment to shielding investors from potential fraud and misconduct in the crypto realm, has urged both NFT issuers and investors to engage with securities lawyers before embarking on any NFT transactions.

The SEC’s move is not just an isolated incident but a harbinger of potential legal intricacies for those operating in the NFT space. It reinforces the importance of adhering to established regulations to ensure the credibility and prosperity of the NFT market.

 

You can purchase Lucky Block here. Buy LBLOCK

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$250 Min Deposit
9.8
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$50 Min Deposit
9
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9

Learn to Trade

Never Miss A Trade Again

step 1
Signal Notification

Real-time signal notifications whenever a signal is opened, closes or Updated

step 2
Get Alerts

Immediate alerts to your email and mobile phone.

step 3
Entry Price Levels

Entry price level for every signal Just choose one of our Top Brokers in the list above to get all this free.

Share with other traders!

telegram
Telegram
forex
Forex
crypto
Crypto
algo
Algo
news
News