SEC charges LA-based media and entertainment company Influence Theory for unregistered offering of NFTs
WASHINGTON, DC–(Newsfile Corp. – August 28, 2023) – The Securities and Exchange Commission today charged Impact Theory, LLC, a media and entertainment company headquartered in Los Angeles, with making an unregistered offering of crypto asset securities. Alleged non-fungible tokens (NFTs). Impact Theory raised approximately $30 million through the offering from hundreds of investors including investors across the United States.
Pursuant to the SEC order, from October to December 2021, Impact Theory offered and sold three tiers of NFTs, known as Founders Keys, which Impact Theory designated “Legendary,” “Heroic,” and ” tireless” said. The order found that Impact Theory encouraged potential investors to view the purchase of Founder’s Key as an investment in the business, saying that if Impact Theory was successful in its efforts, investors would benefit from their purchases. Among other things, Impact Theory emphasized that it was “trying to create the next Disney” and, if successful, would provide “tremendous value” to the founding principal buyers. The order found that the NFTs offered and sold to investors were investment contracts and therefore securities. Accordingly, Impact Theory violated federal securities laws by offering and selling these crypto asset securities to the public in an unregistered offering that was not otherwise exempt from registration.
“Absent a valid exemption, an offering of securities, in any form, must be registered,” said Antonia Epps, director of the SEC’s New York regional office. “Without registration, investors of all types are deprived of the robust disclosures and other safeguards long provided by our securities laws.”
Without admitting or denying the SEC’s findings, Impact Theory agreed to a cease-and-desist order, which found that it violated the registration provisions of the Securities Act of 1933 and required it to pay more than $6.1 million in total. has ordered. and a civil penalty. The order also sets up a Fair Fund to refund the amount paid by the aggrieved investors to buy NFTs. Impact Theory agreed to destroy all Founder’s Keys in its possession or control, to publish notice of the order on its websites and social media channels, and to forfeit any royalties that Impact Theory may receive in the future associated with Founder’s Keys. May be obtained from secondary market transactions.
The SEC investigation was conducted by Benjamin Mishkin, Jessica Quinn and Judith Weinstock of the SEC’s New York Regional Office. Henne L. of the Examination Division. Kim, Gwen Liccardo of the Enforcement Division’s Crypto Assets and Cyber Unit (CACU), Pamela Sawhney and Mark R. Sylvester and Carmen Tavares Alam, Ignacio Franceschelli and Joshua Mallett of the Division of Economic and Risk Analysis provided assistance. The investigation was supervised by Sheldon Pollock, David Hirsch, and Jorge Tenreiro.
Source: www.investorsobserver.com
