SEC Charges Impact Theory Over NFT Sales
The SEC has recently taken enforcement action against Impact Theory Inc., a digital asset development firm, for selling unregistered securities via its sale of non-fungible tokens (NFTs). According to the SEC, Impact Theory sold digital token securities to investors in the form of NFTs without registering the securities. The agency also found that the NFTs were sold to non-accredited investors.
Impact Theory was also charged by the SEC for failing to disclose the relevant information necessary for investors to make informed decisions, such as the compensation arrangements between the company and the promoters of the sale. The company was also alleged to have failed to register the NFTs pursuant to Section 5 of the Securities Act of 1933.
The SEC’s action against Impact Theory highlights the agency’s commitment to holding digital asset issuers accountable for their actions. It also serves as a warning to investors that NFTs may constitute the sale of securities and require registration with the SEC. Companies that are considering selling NFTs should consult with a securities attorney to ensure compliance with all relevant laws and regulations.