{"id":150373,"date":"2023-09-06T01:29:00","date_gmt":"2023-09-05T19:59:00","guid":{"rendered":"https:\/\/dripp.zone\/news\/?p=150373"},"modified":"2023-09-06T01:29:00","modified_gmt":"2023-09-05T19:59:00","slug":"sec-settles-landmark-nft-enforcement-action-for-6m-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/sec-settles-landmark-nft-enforcement-action-for-6m-crypto-news\/","title":{"rendered":"SEC Settles Landmark NFT Enforcement Action For $6M – Crypto News"},"content":{"rendered":"
\n

Last week, the SEC charged an NFT project with selling unregistered securities in a first for the agency.<\/p>\n

Impact Theory, a media company that raised over $30M from NFT sales in 2021, settled<\/a> the lawsuit for $6.1M without admitting any wrongdoing.<\/p>\n

\u201cAlthough we are disappointed that the SEC has chosen to broadly question the exciting technical innovations that make digital assets possible through the lens of the securities laws, we remain optimistic for the future of this industry in the United States,\u201d said<\/a> co-founder Tom Bilyeu.<\/p>\n

The case could have far-reaching implications for the NFT space, rife with promises of future value and utility.<\/p>\n

Orlando Cosme<\/a>, a managing attorney at OC Advisory, a crypto-focused boutique law firm, thinks it\u2019s possible that the SEC charged the NFT project as part of a broader effort to build a series of settlements.<\/p>\n

From the SEC\u2019s perspective, with limited resources and operating in a novel area of the law, \u201cyou want a lot of wins,\u201d Cosme told The Defiant. The lawyer emphasized that while Impact Theory didn\u2019t admit any wrongdoing as part of its settlement, the case could still prove useful to the SEC.<\/p>\n

\u201cThe SEC has this habit of relying on settlements,\u201d he said. Cosme added that the agency can cite settlements without establishing proper legal precedents.<\/p>\n

The charges against Impact Theory are the latest blow to a sector that took crypto by storm in the bull market \u2014 NFT projects racked up celebrity endorsements with promises of new media empires and talk of recurring income for artists through royalties.<\/p>\n

Now, the SEC has picked off an NFT project, leaving the rest of the space, still reeling from price drops of 90% or more, to ponder what\u2019s coming next.<\/p>\n

Jordan Teague<\/a>, who runs a crypto-native law firm, noted that Impact Theory isn\u2019t necessarily a champion of crypto\u2019s ideals, which might have made the organization more likely to settle. \u201cI think we were all like \u2018Who\u2019s Impact Theory? Who even was this?\u2019,\u201d Teague told The Defiant.<\/p>\n

\u201cI think they were just like, just let us out of here, let us pay a fine and move on,\u201d she said. \u201cAs they aren’t a web3 native company, I suspect they may not care about the precedent for the space.”<\/p>\n

Deceptive Marketing<\/h2>\n

The SEC highlighted that Impact Theory claimed it was \u201ctrying to build the next Disney.\u201d<\/p>\n

Teague said that Impact Theory\u2019s marketing likely played into the SEC\u2019s charges. \u201cI was not surprised to see an enforcement action against an NFT project that really didn’t have a lot of value other than these promises that if you buy our NFTs, we’re going to turn your investment into something valuable.\u201d<\/p>\n

Cosme agreed, suggesting that NFT projects be mindful of the language they use when describing their project. \u201cAnything that sounds like, hey, I am offering you an investment, I\u2019m offering these promises, you generally want to avoid,\u201d he said.<\/p>\n

Cosme does think that NFTs may prove more resistant to a legal assault than fungible assets, issuers of which the SEC has gone after extensively. With NFTs, some traits become more valuable than others, making it easier to make the argument that the tokens are collectibles, rather than securities.<\/p>\n

Moving forward, eyes may turn to the most significant player in the space, Yuga Labs, the creator of Bored Apes, received<\/a> a probe from the SEC in October 2022.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Last week, the SEC charged an NFT project with selling unregistered securities in a first for the agency. Impact Theory, a media company that raised over $30M from NFT sales in 2021, settled the lawsuit for $6.1M without admitting any wrongdoing. \u201cAlthough we are disappointed that the SEC has chosen to broadly question the exciting […]<\/p>\n","protected":false},"author":2,"featured_media":150374,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[274,273,272,244,266,271,268,270,269,267],"class_list":["post-150373","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-de-fi","tag-crypto-finance","tag-decentralized-finance","tag-liquidity","tag-metamask","tag-pancake","tag-slippage","tag-sushiswap","tag-tronlink","tag-trust-wallet","tag-uniswap"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/150373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=150373"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/150373\/revisions"}],"predecessor-version":[{"id":150376,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/150373\/revisions\/150376"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/150374"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=150373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=150373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=150373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}