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Tom Bilyeu’s Impact Theory Faces SEC Probe For Offering Unregistered NFTs

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Tom Bilyeu
Tom Bilyeu

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The United States Security and Exchange Commission has charged  Impact Theory, the digital asset firm, over issuing unregistered, non-fungible tokens. Impact Theory raised $30 million from hundreds of investors, including investors across the United States, through the NFT offering.

Impact Theory Faces SEC Probe

In an August 28 press release, the United States Security and Exchange Commission confirmed tabling legal charges against Impact Theory, LLC, for conducting an unregistered offering of crypto asset securities in the form of purported non-fungible tokens.

Established in 2016, Impact Theory is a digital asset incubation studio that creates and produces entertaining original content focusing on themes of empowerment by bringing together some of the most talented creators, writers, and artists. Impact Theory distributes its unscripted, scripted, and publishing content across multiple digital platforms, including the emerging NFT space.

The digital asset incubation studio was started by Tom Bilyeu and his wife and business partner, Lisa Bilyeu. The digital asset incubation studio has built a loyal audience in the millions with over one billion social media impressions, and its content catalog has received hundreds of millions of views.

Based on the chargesheet tabled before the commission, Impact Theory offered and sold three tiers of NFTs, known as Founder’s Keys, which Impact Theory called “Legendary,” “Heroic,” and “Relentless,” in December 2021. The unregistered NFT offering raised over $30 million.

The order finds that Impact Theory encouraged potential investors to view the purchase of a Founder’s Key as an investment into the business, stating that investors would profit from their purchases if Impact Theory were successful in its efforts. The order finds that the NFTs offered and sold to investors were investment contracts and, therefore, securities.

Impact Theory Fined $6.1 Million

According to the Commission, Impact Theory violated the federal securities laws by offering and selling these crypto asset securities to the public in an unregistered offering that was not exempt from registration. While commenting about the probe, Antonia Apps, the Director of the US Security and Exchange Commission New York Office, remarked:

“Absent a valid exemption, offerings of securities, in whatever form, must be registered. Without registration, investors of all types are deprived of the protections afforded them by the robust disclosures and other safeguards long provided by our securities laws.”

In the meantime, the digital asset firm Impact Theory attracts a combined total of more than $6.1 million in disgorgement, prejudgment interest, and a civil penalty. Impact Theory is expected to appear before the commission to deny or admit the legal findings.

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