SEC calls NFTs securities in case against Impact Theory

The US Securities and Exchange Commission (SEC) accused the media company Impact Theory of promoting securities without registration. The firm used NFTs to attract investors, raising about $30 million.

In 2021, Impact Theory released the Founder's Keys NFT collection. The company promoted the project from October to December 2021. The collection includes tokens of three different rarity levels.

The regulator said the firm positioned the project as a business investment. In particular, it guaranteed holders high profits and promised extensive prospects.

In this regard, according to the SEC ruling, these NFTs had the features of an investment contract and, as a result, belong to securities. By promoting the collection, the company violated federal laws in this industry.

“Unless there is an exception, any offer of securities must be registered. Without this, investors of all types are deprived of the protection afforded them by disclosure and other protections provided by current law,” said Antonia Apps, head of the SEC’s New York regional office.

Impact Theory agreed to pay a $6.1 million fine without admitting or denying guilt. At the same time, the company undertakes to return all funds received as a result of promoting the collection.

After this, the tokens will be destroyed, and mention of them will be removed from the website and groups on social networks of the counterparty.

This is not the first time that the SEC has tried to take control not only of crypto assets, but also of other sectors in the industry. In particular, the regulator tried to change the definition of “exchange” to expand its powers to DeFi protocols.