Latest Impact Theory Founder's Key News
The SEC charged Impact Theory with unlawful crypto asset securities offerings via NFTs, which the company sold for approximately $30 million in 2021.
The Deets
- Impact Theory sold three tiers of NFTs called "Founder's Keys," labeled "Legendary," "Heroic," and "Relentless."
- The SEC declared these NFTs as investment contracts, thus qualifying as securities.
- The company promised investors "tremendous value," emphasizing their goal to "build the next Disney."
- A cease-and-desist order, more than $6.1 million in penalties, and a Fair Fund to refund investors are among the repercussions.
The Bulk
Impact Theory, an LA-based media company and NFT project founded by Tom Bilyeu, finds itself in legal turmoil after the Securities and Exchange Commission charged it for unlawfully offering crypto asset securities through NFTs. The SEC's verdict is based on Impact Theory's "Founder's Keys" NFT drop, which had three tiers: "Legendary," "Heroic," and "Relentless."
They highlighted the promise of "tremendous value" for investors, boldly stating their aim to "build the next Disney." This marketing strategy was the SEC's basis for categorizing these NFTs as investment contracts and, by extension, securities.
In response, the SEC issued a cease-and-desist order and imposed a total fine of more than $6.1 million. The order also establishes a Fair Fund to refund the affected investors.
Impact Theory agreed to the SEC's orders, and founder Tom Bilyeu spoke out on the subject yesterday publicly.
❗Why It Matters
The SEC's action against Impact Theory is a landmark case that could set a precedent for the treatment of NFTs as securities for any teams that spoke on or promoted its NFTs in a manner similar to Bilyeu's. The announcement highlights the regulatory challenges companies may face in leveraging NFTs as investment tools moving forward.
📊 By the Numbers
Impact Theory raised approximately $30 million from their unregistered NFT offering, and the SEC's imposed penalties total over $6.1 million.
🎤 Founder Feedback
Impact Theory is pleased to announce that we have reached a settlement with the U.S. Securities and Exchange Commission in which we resolved the SEC's investigation. We are happy to have concluded the SEC's investigation, so that we can focus on the future of our business and on our Community.Tom Bilyeu
🔜 What's Next?
Impact Theory is mandated to destroy all Founder's Keys in its possession, publish notice of the SEC's order, and forgo any future royalties from these NFTs.
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