Massive $6.1 Million NFT Scandal: SEC Takes Down Impact Theory – What You Need to Know!

• The Securities and Exchange Commission (SEC) has filed charges against Impact Theory, a media firm headquartered in Los Angeles, for the sale of unregistered securities in the form of non-fungible tokens (NFTs) referred to as “Founder’s Keys” during the latter part of 2021.
• According to the Securities and Exchange Commission (SEC), Impact Theory purportedly generated more than $30 million by means of these non-fungible token (NFT) transactions, presenting them as opportunities for investment in the prospective triumph of the company.
• While refraining from accepting culpability, the corporation has consented to a cease-and-desist order that acknowledges transgressions of the Securities Act of 1933. Additionally, the company will remit a sum of $6.1 million, encompassing disgorgement, prejudgment interest, and penalties.
• The Securities and Exchange Commission (SEC) has additionally outlined its intention to establish a Fair Fund to provide compensation to investors who incurred financial losses due to their acquisition of these non-fungible tokens (NFTs).
• Impact Theory has made a firm commitment to the eradication of all the Founder’s Keys NFTs under its possession or control. This resolution has been publicly declared on its official website and other social media platforms.
• Additionally, Impact Theory has decided to relinquish any potential royalties that may arise from subsequent secondary market transactions involving these tokens.
• The Republican Commissioners of the Securities and Exchange Commission (SEC), namely Hester Peirce and Mark Uyeda, expressed dissent with the SEC’s decision.
• They contended that the assurances made in relation to these non-fungible tokens (NFTs) did not meet the criteria of investment contracts.
• Additionally, they raised concerns regarding the application of the Howey Test, a legal framework used to ascertain whether transactions are subject to securities regulations.

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