The United States Securities and Exchange Commission (SEC) recently charged entertainment company Impact Theory for allegedly conducting the sales of unregistered securities in the form of nonfungible tokens (NFTs) called “Founder’s Keys”. The SEC believes that the NFTs were investment contracts and qualified as securities, and that the company violated the Securities Act of 1933 for selling the NFTs without registration. SEC commissioners Hester Peirce and Mark Uyeda wrote a dissenting statement against the SEC’s action, arguing that the “handful of company and purchaser statements cited by the order are not the kinds of promises that form an investment contract”. They also highlighted that the SEC does not routinely bring enforcement actions against the sellers of “watches, paintings, or collectibles” that also give out vague promises to “build the brand” and increase the resale value of the items.The event triggered responses from community members, pointing out how the decision could be “problematic,” and how many NFT projects fit the description and may be next on the SEC’s hit list. Cointelegraph reached out to Oscar Franklin Tan, the chief legal officer of NFT platform Enjin, who said that it’s very problematic to say that all NFTs are securities. Tan explained that the SEC order should not hold back creators from trying the spectrum of Web3 economic and social models, and that the lack of clear rules will “discourage creators from trying Web3 models” and that it will lead to the space never discovering the full benefits of Web3.On Feb. 22, a United States judge said in a ruling that NBA Top Shot NFTs may qualify as securities as they may create a “sufficient legal relationship between investors and promoter to establish an investment contract”. The SEC’s recent action against NFTs has sparked debate in the community, with some arguing that many NFT projects fit the description put out by the SEC, while others call for better regulatory clarity from the SEC.

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Information	Details
Geography	North America
Countries	🇺🇸
Sentiment	neutral
Relevance Score	8
People	Oscar Franklin Ta, Hester Peirce, Mark Uyeda
Companies	Azuki, Impact Theory, Enjin, Securities Act of 1933, SEC, NBA Top Shot.
Currencies	ethereum, xrp, nfts, founder’s keys, bitcoin
Securities