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September 26, 2023

SEC Charges Impact Theory Over NFT Sales

The U.S. Securities and Exchange Commission (SEC) has charged Impact Theory with violations of the federal securities laws for closely related sales of its non-fungible token (NFT) and cryptocurrency coins. In a Complaint filed yesterday in federal district court, the SEC alleged that Impact Theory raised over $2 million from approximately 6,000 investors nationwide by offering its coin and NFTs to unregistered investors. The Complaint further alleged that Impact Theory made numerous material misrepresentations to investors in order to sell its coins and NFTs, including claims about high expected returns, the potential to influence cryptocurrency prices, and use of investor funds. The Complaint also alleged that Impact Theory falsely represented to investors that their investments were registered with the SEC and that the SEC had approved the offering. Impacts’ coin has plummeted in the wake of the Complaint, losing nearly 50% of its value in the two days since the filing. The SEC is seeking disgorgement of ill-gotten gains, penalties, and injunctive relief.