Key Points:
The company managed to raise approximately $30 million from numerous investors, both domestic and international, during the offering.
The commission’s allegations center around the violation of the Securities Act of 1933. Impact Theory allegedly offered and sold NFTs, dubbed “Founder’s Keys,” between October and December 2021, using these tokens as an investment contract, promising potential investors based on the company’s success.
These tokens were marketed as a gateway to exclusive content and benefits from Impact Theory, which aspired to be the “next Disney.”
The agency contends that by promoting the NFTs as investment opportunities with profit potential, Impact Theory essentially treats them as securities. Under the Howey test, a legal framework to determine if an asset is a security, the NFTs met the criteria for investment contracts.
In response to the charges, Impact Theory has agreed to a settlement with the SEC, in which they will pay fines amounting to over $6.1 million. In addition, the company will refund the investment money to the stakeholders and ensure the destruction of the NFTs involved in the offering.
This enforcement by the commission underscores the need for compliance and transparency within the evolving landscape of crypto assets and NFTs, and it’s also one of the rare times the agency finds “interest” in this area.
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