SEC Charges Impact Theory with Unregistered Offering of Crypto Asset Securities
The Securities and Exchange Commission has charged Impact Theory LLC, an entertainment company based in Los Angeles, with conducting an unregistered offering of crypto asset securities in the form of non-fungible tokens (NFTs). The company raised around $30 million from investors across the US through three tiers of NFTs known as Founder's Keys. These were marketed as an investment opportunity and those who purchased them would potentially benefit if the business was successful. Without admitting or denying the SEC’s findings, Impact Theory agreed to a cease-and-desist order stating that they had violated registration provisions under the Securities Act of 1933, ordering them to pay a fine totaling roughly $6.1 million. They must also destroy all their Founder’s keys, publish notice of the order on their websites and social media, remove royalties caused by future reinvestments involving them, and establish a fund to return investments to affected investors.