The US SEC charged Impact Theory with the “unregistered offering of crypto asset securities.” The LA-based entertainment company has paid a $6 million settlement following the charges.
On Monday, the SEC announced charging the LA-based Impact Theory with an unregistered securities offering. The agency claims Impact’s 2021 NFT launch falls under an unregistered securities offering.
SEC: Impact Theory’s NFT Launch Is an Investment Contract
In a press release, the SEC claimed the company conducted “an unregistered offering of crypto asset securities in the form of purported non-fungible tokens (NFTs).” According to the SEC, Impact Theory raised approximately $30 million from hundreds of investors through its 2021 offering.
The securities agency claims that from October to December 2021, Impact offered and sold three tiers of NFTs, known as Founder’s Key, which the company called “Legendary,” “Heroic,” and “Relentless.” The press release explains Impact Theory “encouraged potential investors to view the purchase of a Founder’s Key as an investment into the business, stating that investors would profit from their purchases if Impact Theory were successful in its efforts.” The company allegedly stated that it was “trying to build the next Disney,” and if successful, would deliver “tremendous value” to Founder’s Key purchasers.
The SEC’s order, therefore, found that Impact’s NFT sales to investors were investment contracts and, thus, securities. The securities agency established that Impact Theory violated federal securities laws by offering and selling these NFTs to the public without the necessary registration.
Antonia Apps, Director of the SEC’s New York Regional Office, said:
“Absent a valid exemption, offerings of securities, in whatever form, must be registered.”
Adding,
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Author: Jana SerfonteinDid you like this?
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