SEC charges Impact Theory with unregistered securities offering in NFT launch

SEC claims that a 2021 NFT launch falls under an unregistered securities offering

article-image

Piotr Swat/Shutterstock modified by Blockworks

share

The US Securities and Exchange Commission charged Impact Theory, an LA-based media and entertainment company, with the “unregistered offering of crypto asset securities.”

The SEC claims that Impact Theory’s NFT launch in the fall of 2021 counts as an investment contract because the company “encouraged potential investors” to see the Founder’s Keys NFTs as an investment in their business. 

Impact sold three tiers of the NFTs, dubbing them Legendary, Heroic and Relentless. It raised roughly $30 million in its offering. 

The SEC alleges that the company “emphasized that it was ‘trying to build the next Disney,’ and, if successful, it would deliver ‘tremendous value’ to Founder’s Key purchasers.” 

In its order, the SEC said that Impact Theory planned to use the NFT proceeds for “development” and “bringing on more team” as well as “creating more projects.”

“Given these statements, numerous prospective and actual purchasers of KeyNFTs stated on Impact Theory’s Discord channels that they viewed KeyNFTs as investments into the company and understood Impact Theory’s statements to mean that the company’s development of its projects could translate to appreciation of the KeyNFTs’ value over time,” the SEC said.

Impact Theory agreed to a cease-and-desist and will pay around $6.1 million in “disgorgement, prejudgment interest, and a civil penalty.”

Additionally, Impact Theory will establish a “Fair Fund” to return money back to “injured investors.” All Founder’s Key’s currently in possession of the company will be destroyed.  

“Absent a valid exemption, offerings of securities, in whatever form, must be registered,” SEC’s New York Regional Office Director, Antonia Apps, said. “Absent a valid exemption, offerings of securities, in whatever form, must be registered,” said Antonia Apps, director of the SEC’s New York Regional Office.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

morpho 2 graphic.png

Research

Utilizing a ‘DeFi Mullet’ approach, Coinbase’s Bitcoin-backed loans integration with Morpho demonstrates a powerful blueprint for CEXs to monetize dormant assets by expanding adoption of wrapped products (cbBTC, USDC) while also supporting native and/or preferred DeFi ecosystems (Base) which can further lead to downstream growth in onchain liquidity and increased utilization of the related assets.

article-image

The platform also rolled out 13 tokenized funds for institutions on the Connect platform

article-image

The company’s expanded lineup introduces new ETF products, as more and more issuers get into crypto funds

article-image

President Donald Trump announced a 10% levy on almost all goods and additional tariffs on so-called “worst offending” countries

article-image

Solana may be in “recomposition” mode, as new protocols put usefulness ahead of mere virality

article-image

The stablecoin issuer will have to contend with bigger players and the interest rates environment

article-image

The president reportedly was still working on his tariff policy plans late Tuesday evening