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The Securities and Exchange Commission (SEC) has finally laid its ponderous paws on the world of NFTs. In a nutshell, it has charged YouTuber, Impact Theory<\/a>, with selling unregistered securities in the shape of Non-Fungible Tokens<\/a>.<\/p>\n Back in late 2021, while in the process of attempting to \u201cbuild the next Disney,\u201d the \u2018education and entertainment\u2019 company offered subscribers the chance to purchase NFTs in the shape of 3 tiers of \u2018Founders Keys.\u2019 At the time, raising a reported $30 million from the sale of 13,572 NFTs. However, Impact Theory chose to tread some hazy ground by inferring that the tokens represented an \u2018investment\u2019 in the company.<\/p>\n Taking this statement to heart, the SEC labored into action, eventually concluding that the NFTs represented investment contracts, and therefore securities. As a result, the SEC judged that the tokens violated the Securities Act due to Impact Theory selling them without prior registration.<\/p>\n Following the SEC\u2019s investigations, Impact Theory has agreed to fork out in excess of $6 million to settle the case. However, as of writing, it has not formally admitted to the allegations that the SEC put forwards. In addition, the L.A. based media firm has also established a fund to compensate those that engaged with its NFT initiative, and potentially reclaim and burn the tokens involved.<\/p>\n Will be live in Discord later to answer questions. @impact_theory<\/a> is pleased to announce that we have reached a settlement with the U.S. Securities and Exchange Commission in which we resolved the SEC\u2019s investigation.\u00a0 We are happy to have concluded the SEC\u2019s investigation, so\u2026<\/p>\n \u2014 Tom Bilyeu (@TomBilyeu) August 28, 2023<\/a><\/p>\n<\/blockquote>\n Despite the SEC ruling being the first of its kind in the NFT world, Impact Theory is not alone in its non-fungible promises. In what became a common trend, a large number of projects have similarly offered a share in their company, as well as future dividends, in the shape of NFTs. Essentially, seeing the technology as a way of tracking support in their endeavors, and rewarding loyal followers.<\/p>\n However, as the SEC ruling implies, many of these projects could now fall foul of the Securities Act and face similar charges. So, with a precedent now in place, this latest investigation may forecast a turbulent period for a number of players in the NFT space.<\/p>\n Want more? Connect with NFT Plazas<\/b><\/p>\n Join the Weekly Newsletter<\/a> *All investment\/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.<\/em><\/small><\/p>\n Decentralised human, Explorer, Adventurer.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n
The SEC Opens a Major Can of Non-Fungible Worms<\/strong><\/h2>\n
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