Impact

Quick take:
<ul>
 <li>The SEC argues Impact Theory offered and sold three tiers of NFTs, dubbed founder keys between October and December 2021.</li>
 <li>The company reportedly encouraged investors to view the purchase of those NFTs as an investment into the business.</li>
 <li>Impact Theory was also ordered to establish a Fair Fund to refund affected investors.</li>
</ul>
The US Securities and Exchange Commission (SEC) has enforced the first action related to the sale of an unregistered offering of crypto asset securities. Impact Theory, a podcast studio founded by Tom Bilyeu, was charged with offering three tiers of non-fungible tokens to prospective buyers between October and December 2021.
According to the regulatory agency, the order said Impact Theory sold NFTs dubbed Founder Keys, which it named “Legendary,” “Heroic,” and “Relentless.” through OpenSea, encouraging potential investors to view the purchase as an investment into the company.
NFTs are digital collectibles stored on the blockchain. They can be used to provide proof of ownership in an entity, digital art, music track, or JPEGs.
The concept of using blockchain technology to enable communities to claim ownership in online businesses is one of the biggest selling points of <a href="https://www.nftgators.com/what-is-an-nft/" rel="noopener noreferrer nofollow">NFTs</a>.
According to the SEC’s order, Impact Theory told investors that they would profit from the purchase if it was successful in its efforts.
“Among other things, Impact Theory emphasized that it was “trying to build the next Disney,” and, if successful, it would deliver “tremendous value” to Founder’s Key purchasers,” the SEC wrote in a <a href="https://www.sec.gov/news/press-release/2023-163" target="_blank" rel="noopener noreferrer nofollow">press release</a> on Monday.
As a result, the SEC established that the NFTs sold to investors as Founder Keys were investment contracts and, therefore securities.
As a result, “Impact Theory violated the federal securities laws by offering and selling these crypto asset securities to the public in an unregistered offering that was not otherwise exempt from registration,” the order states.
According to Antonia Apps, Director of the SEC’s New York Regional Office, unless exempted, “offerings of securities, in whatever form, must be registered.”
“Without registration, investors of all types are deprived of the protections afforded them by the robust disclosures and other safeguards long provided by our securities laws,” she said.
The SEC recently lost lawsuits against crypto exchange companies <a href="https://www.nftgators.com/binance-accuses-the-sec-of-taking-a-unilateral-decision-to-define-crypto-market/" rel="noopener noreferrer nofollow">Binance</a> and Coinbase related to claims offering unregistered crypto assets as securities.
Impact Theory agreed to a cease-and-desist order without admitting or denying the SEC’s findings that it violated the Securities Act of 1933. The company also agreed to pay more than $6.1 million in disgorgement, prejudgment interest, and a civil penalty.
The order also required Impact Theory to establish a Fair Fund to return the money raised from the direct sale of the NFTs. Impact Theory reportedly raised $30 million from the offering.&nbsp;
The company also agreed to destroy all the Founder Key NFTs in its possession or control and eliminate any royalty fees that it could receive from the secondary sale of the Founder Key NFTs.
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The post <a rel="noopener noreferrer nofollow" href="https://www.nftgators.com/impact-theory-to-pay-more-than-6m-to-sec-in-first-enforcement-action-for-selling-nfts/">Impact Theory to Pay More than $6M to SEC In First Enforcement Action for Selling NFTs</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://www.nftgators.com">NFTgators </a>.

Impact Theory to Pay More than $6M to SEC In First Enforcement Action for Selling NFTs

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