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ARTICLE · 31 AUGUST 2023

The SEC's First NFT Enforcement Action: SEC v. Impact Theory

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On Monday, August 28, 2023, the U.S. Securities and Exchange Commission (SEC) entered into a settled enforcement action (the "Order") with Impact Theory, LLC, a media and entertainment company...

United StatesTechnology
Peter I. Altman
Peter I. Altman
Michael Asaro
Michael Asaro
James J. Benjamin Jr.
James J. Benjamin Jr.
Charles F. Connolly
Charles F. Connolly
Anne M. Evans
Anne M. Evans
Katherine Rachel Goldstein
Katherine Rachel Goldstein
Claudius B. Modesti
Claudius B. Modesti
Parvin Daphne Moyne
Parvin Daphne Moyne
Kate L. Powers
Kate L. Powers
+1 more
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Key Points

  • On August 28, 2023, the SEC charged Impact Theory, LLC, a media company with an unregistered securities offering through its sale of NFTs. This marks the first time that the SEC has brought an enforcement action involving the sale of NFTs as unregistered securities. This may signal a new effort by the SEC to bring the NFT market, which has exploded in popularity in recent years, into its jurisdiction.
  • As part of the settlement, the company agreed to pay $6.1 million in disgorgement and penalties. The company also committed to several noteworthy undertakings, including the destruction of remaining NFTs within its control and the revision of the code for the NFTs to prevent it from receiving any future royalties from secondary market transactions. The settlement does not include admissions of fraud.

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