SEC Cracks Down on LA Entertainment Company for Unregistered NFT Offering

The Securities and Exchange Commission (SEC) has charged media and entertainment company Impact Theory with conducting an unregistered offering of non-fungible tokens (NFTs). Impact Theory raised around $30 million from investors through the offering, which involved three tiers of NFTs called Founder's Keys. The SEC found that Impact Theory marketed the purchase of these NFTs as an investment in the company, violating federal securities laws. Without admitting or denying the findings, Impact Theory agreed to a cease-and-desist order and will pay over $6.1 million in disgorgement, prejudgment interest, and a civil penalty. A Fair Fund will be established to return money to injured investors, and Impact Theory will destroy all Founder's Keys in its possession.