On August 28, 2023, Impact Theory LLC, a US based entertainment company, received a cease-and-desist order and settlement fine of US$6.1 million by the United States Securities and Exchange Commission (SEC), for selling unauthorized securities during the company’s sale of nonfungible tokens (NFTs) in 2021.

Between October and December 2021, Impact Theory offered and sold crypto asset securities known as Founder’s Keys in the form of NFTs. These KeyNFTs were offered in three tiers (Legendary, Heroic, and Relentless) at varying prices. Impact Theory promoted them as investments, emphasizing potential profits and comparing their venture to building the next Disney. They conducted live events and shared information on various platforms, encouraging investors to see KeyNFTs as high-value investments. This effort resulted in approximately $30 million raised from numerous investors, including those in the US.
Accordingly, Impact Theory violated Section 5(a) and Section 5(c) of the Securities Act by selling these crypto asset securities to the public without proper registration or a filed registration statement.

In addition to the C&D order and Penalty, Impact Theory has also agreed to establish a “Fair Fund” to return money to investors who had purchased the company’s NFTs, to destroy all Founder’s Keys in its possession, and to publish a notice of the order on its websites and social media channels.