//SEC takes first action against an NFT project as an unregistered security

SEC takes first action against an NFT project as an unregistered security

Illustration by Alex Castro / The Verge

Today, the SEC announced its first enforcement action against NFTs in a case that was settled by Impact Theory, the NFTs’ issuer.

The SEC said the NFTs issued by Impact Theory were unlicensed securities. The company agreed to a cease-and-desist order, paid $6.1 million in penalties, and agreed to destroy all of the NFTs in question still in its control. Impact Theory will also eliminate any royalties that it might have received from sales of those NFTs on secondary markets.

It’s not clear whether the enforcement action means the SEC broadly views NFTs as securities offerings

In 2021, the company sold three tiers of NFTs that it called Founder’s Keys. “Impact Theory invited potential investors to view the purchase of a KeyNFT as an…

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