In a significant move underscoring the evolving regulatory landscape surrounding cryptocurrencies, the US Securities and Exchange Commission (SEC) has turned its attention to the Non-Fungible Tokens (NFTs) market, initiating legal action against media and entertainment company Impact Theory.
The key points of the content are:
- The SEC alleges that Impact Theory conducted an unregistered offering of crypto asset securities as Non-Fungible Tokens, raising approximately $30 million from hundreds of investors, including those across the United States.
- Impact Theory introduced three tiers of NFTs, known as Founder’s Keys, labeled as “Legendary,” “Heroic,” and “Relentless,” between October and December 2021.
- Impact Theory actively promoted the “Founder’s Keys” as an investment opportunity, positioning them as a potentially lucrative venture.
- The SEC determined that these NFTs constituted investment contracts and thus fell under the definition of securities.
- Impact Theory has agreed to a cease-and-desist order and will pay over $6.1 million in disgorgement, prejudgment interest, and civil penalties. A Fair Fund will also be established to reimburse investors for the amounts they paid to acquire the NFTs.
The recent enforcement action taken by the SEC against Impact Theory for its allegedly “unregistered NFT offering” marks a significant development in the regulatory landscape surrounding the crypto industry. The outcome of this case could set a precedent for future regulations and shape the trajectory of the Non-Fungible Token market as a whole.
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