The United States Securities and Exchange Commission (SEC) has charged Impact Theory, a Los Angeles-based media and entertainment firm, for unregistered offering of nonfungible tokens (NFTs) known as “Founder’s Keys”, which raised approximately $30 million from investors. Without admitting or denying the SEC’s findings, Impact Theory agreed to a cease-and-desist order and will pay a combined total of more than $6.1 million in disgorgement, prejudgment interest, and a civil penalty. The SEC’s review determined these tokens to fall within the purview of investment contracts, effectively labeling them as securities. This means that their sale should have been registered under the Securities Act of 1933 or qualified for an exemption – neither of which Impact Theory fulfilled. Antonia Apps, the director of the SEC’s New York Regional Office, emphasized the importance of registration, stating that “without registration, investors of all types are deprived of the protections afforded them” offered by established securities laws. In addition to the financial implications, the company will also proceed to destroy any Founder’s Keys it currently possesses. As a gesture of transparency, Impact Theory has pledged to broadcast the SEC’s order across its digital platforms, and abstain from obtaining any royalties from subsequent secondary market transactions involving the said NFTs.

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Information	Details
Geography	North America
Countries	🇺🇸
Sentiment	negative
Relevance Score	10
People	SEC, Antonia Apps
Companies	Impact Theory, Disney, Securities Act of 1933, SEC, New York Regional Office
Currencies	None
Securities