Los Angeles-based media firm Impact Theory recently found itself in hot water with the United States Securities and Exchange Commission (SEC) after it issued non-fungible tokens (NFTs) that, under standing regulations, are considered unregistered securities, and therefore illegal.
This is, essentially, the SEC’s first-ever act of enforcement involving NFTs.
As of Monday, August 28th, Impact Theory has been ordered to compensate investors who bought the aforementioned NFTs. In this particular case, Impact Theory’s NFTs are considered securities as the company told those who bought them that they offered great value and that investors stood to make a profit from them.
As a result of the SEC order, Impact Theory will establish a reimbursement fund to reimburse those who bought the NFTs. The company has also assured the regulator that it will destroy any remaining Founder’s Keys and pay it a penalty of over $6.1 million.
What Sort of NFTs are Involved?
Impact Theory offered an NFT called a Founder’s Key which gives those who buy the said NFT access to its extensive range of online media projects which are focused on new-generation storytelling.
By doing so, those who purchase the Keys essentially invest into the business and stand to earn profits or dividends over time.
