The Securities and Exchange Commission (SEC) accused Impact Theory of conducting an unregistered offering of crypto asset securities in connection with its NFT project. Impact Theory allegedly raised $30M by selling unregistered securities, according to the disciplinary case, which is the first using NFTs.
The company suggested that buying a Founder's Key constituted an investment in the business, promising benefits if Impact Theory succeeded. The SEC ruled that the NFTs sold were investment contracts — therefore, they were securities.
An Impact Theory Founder's Key NFT collection sale on OpenSea allegedly netted over $5.4M.
Impact Theory accepted a cease-and-desist order and a violation of the Securities Act of 1933. They also agreed to pay $6.1M in penalties and interest. However, they did not admit guilt. In addition, the business intends to delete all Founder's Keys NFTs.
Yet, SEC Commissioners Hester Peirce and Mark Uyeda opposed the enforcement action and the application of the Howey Test.