Close Menu
  • News
    • Bitcoin
    • Altcoins
    • DeFi
    • Regulation
    • Market Cap
    • Web 3
    • Scam
  • Blockchain
  • NFT
  • Metaverse
  • Analysis
  • Learn
  • Blog
  • Contact
    • Tech7685@gmail.com
What's Hot

Collect collaborations with Ecocreds to accelerate sustainability in chains

2025-05-24

NFT -turnover drops to $ 129.8 million, Avalanche Sales Surge 200%

2025-05-24

Hyperliquid’s market momentum pushes hype to new high

2025-05-24
Facebook X (Twitter) Instagram
  • Contact
  • Terms & Conditions
  • Privacy Policy
  • DMCA
  • Advertise
  • BitcoinPlatform.com
Facebook X (Twitter) Instagram
Free Cryptocurrency – Bitcoin | Altcoins | Blockchain | News Stories Updated Daily
  • News
    • Bitcoin
    • Altcoins
    • DeFi
    • Regulation
    • Market Cap
    • Web 3
    • Scam
  • Blockchain

    Collect collaborations with Ecocreds to accelerate sustainability in chains

    2025-05-24

    Enjin Blockchain makes cross-chain stablecoin transfers possible with Hyperbridge

    2025-05-24

    Soonchain Partners with a decentralized calculation and AI -gaming

    2025-05-24

    Even launches a dedicated avalanche chain to strengthen the future of Fan-First music

    2025-05-24

    Bubblemaps V2 goes live on BNB chain, unlocking deep tok transparency

    2025-05-23
  • NFT

    NFT -turnover drops to $ 129.8 million, Avalanche Sales Surge 200%

    2025-05-24

    Alchemy acquires NFT Launchpad Heymint to speed up the development of Smart Wallet

    2025-05-23

    Delorean launches a car marketplace on the chains with Patrick Stewart

    2025-05-23

    Beratone NFT Avatars are now live on OpenSea

    2025-05-23

    Hashrate Hackers introduces Ordinals NFT collections supported by Bitcoin Hashrate

    2025-05-22
  • Metaverse

    Shib: The Metaverse – Part of the expanding Shiba Inu ecosystem

    2025-01-03

    Experience to Earn: Everdome’s Metaverse Frontier

    2024-12-30

    Beyond Bots: Meta Motivo and the Dawn of Human Digital Life

    2024-12-13

    Exploring NetVRk: What’s Behind This AI-Powered Virtual Universe?

    2024-10-28

    Council of Europe emphasizes the impact of Metaverse on privacy and democracy

    2024-09-05
  • Analysis

    Hyperliquid’s market momentum pushes hype to new high

    2025-05-24

    According to economist and trader Alex Krüger, there is a new of all time for Bitcoin, but there is a catch

    2025-05-24

    Why the 50 EMA could contain the key

    2025-05-24

    Pi Network Token makes debut debut on Kraken with eternal futures with 20x leverage

    2025-05-24

    World’s Top Crypto Exchange by Trading Volume announces upcoming support for consumer -oriented Altcoin on Binance Alpha

    2025-05-23
  • Learn

    Wat is circulerende levering in cryptocurrency?

    2025-05-23

    What Is a DEX (Decentralized Exchange)?

    2025-05-21

    Blockchain Explained: What It Is, How It Works and Why We Need It

    2025-05-21

    Types of Blockchain Layers Explained: Layer 0, Layer 1, Layer 2 and Layer 3

    2025-05-16

    Token vs. Coin: Key Differences You Must Know as a Beginner

    2025-05-15
  • Blog
  • Contact
    • Tech7685@gmail.com
Free Cryptocurrency – Bitcoin | Altcoins | Blockchain | News Stories Updated Daily
Home»NFT»SEC’s first NFT prosecution may set unsettling precedent
NFT

SEC’s first NFT prosecution may set unsettling precedent

2023-08-31No Comments5 Mins Read
Share
Facebook Twitter LinkedIn Pinterest Email

As cryptocurrencies have entered the mainstream over the last several years, the US Securities and Exchange Commission has not shied away from going after top tokens — and top projects.

But what the US securities regulator had not done, until Monday, was to pursue charges against an NFT project, alleging that a collection of digital artwork up for sale constituted a security.

The surprise ruling, imposed on the not-well-known company Impact Theory, sent industry participants scrambling. Coming between a growing number of SEC investigations, settlements and charges against the likes of Coinbase and Binance, plus individual tokens, the charges stood out.

And the central question has become whether the allegations levied against the Los Angeles-based Impact Theory, which involved about $30 million, were enough to set a precedent against NFTs more broadly as securities.

Read more: SEC charges Impact Theory with unregistered securities offering in NFT launch

Impact Theory, without admitting or denying the SEC’s charges, agreed to cough up $6.1 million and entered into a cease-and-desist order with the regulator poised to freeze its assets.

SEC attorneys claimed the company, which had done business with “hundreds” of investors, positioned and marketing NFTs as offering an investment pathway into its business — not being offered as simple one-off digital collectible sales.

An ‘investment into the business’

The SEC in its legal filing said the purchases of a number of the company’s NFTs, known as keys, were set up to position “the purchase of a Founder’s Key as an investment into the business, stating that investors would profit from their purchases if Impact Theory was successful in its efforts.”

See also  Blur's NFT lender Blend sees volume reach $225 million in less than a month

The ensuing precedent outcome has big implications not only for individual, small-time NFT creators, but also the large companies that power their issuance and secondary sales, plus the NFT marketplaces that facilitate transactions.

In the cease and desist, government attorneys also targeted royalties, which have been contentious in the sector, ordering Impact Theory to amends its smart contracts so as to

“eliminate any royalty that Impact Theory might otherwise receive from any future secondary market transactions.”

NFT transactions have plummeted this year, with weekly trading volumes having fallen to around $70 million recently, down from $1.8 billion in August 2021, according to Dune data.

Adding the uncertainty around what constitutes an NFT security to an already-shaky market that has become far less lucrative than it once was could further slow the market, industry participants told Blockworks.

NFT powerhouses, including the marketplace Magic Eden, have been paying attention.

Joe Doll, Magic Eden’s general counsel, said in a statement that the “biggest takeaway” from the Impact Theory case is that the “regulatory framework applicable to NFTs is being developed real-time while the industry watches and awaits clarity.”

“Now, more than ever, it’s critical that the NFT creators seek the advice of the experienced securities counsel familiar with crypto to ensure their project is following best practices,” Doll said.

The SEC’s crypto priorities

Brian Frye, a professor at the University of Kentucky College of Law and expert on NFT regulation and crypto copyright issues, told Blockworks that the settlement appears to have been overdue — not for Impact Theory, specifically, but for the SEC deeming an NFT collection as a security.

See also  Mad Lads Solana NFTs Gains After Parent Firm Backpack Acquires FTX Europe

“There is no real reason why NFTs would fall outside the SEC’s regulatory authority, especially given how they’re used in practice…and it seems to me, if you look at the economic reality of most NFT projects, the economic reality is that it’s selling a security.”

That’s because — as demonstrated “really clearly and explicitly in this particularly case — the structure of the NFT is claiming that “when you buy one of these NFTs, you are, in effect, purchasing a security interest in the company, and your benefit will primarily be your ability to resell the NFT to someone else for profit.”

While it may serve as a grim surface-level outcome for NFT investors and builders, the settlement may “oddly enough” as a “regulatory juncture” be able to “actually push for positive change,” according to Akash Mahendra, director at Haven1 Foundation and portfolio manager at Yield App.

Noting the NFT market falling to a two-year low in August, Mahendra said that the “unprecedented action against an NFT company” could “potentially inject much-needed accountability into the NFT ecosystem.”

“Falling under SEC scrutiny wasn’t entirely unforeseen, given the resemblance between NFT advertisements and traditional investment contracts,” he told Blockworks. “Assurances of perpetually soaring floor prices and unwavering developer support have raised regulatory eyebrows — particularly as they mirror practices seen in the world of traditional securities.”

Where the digital collectible cards may fall, according to Frye, comes down to the SEC’s interest in terms of the vast world of crypto-related prosecution.

“Is this the kind of thing the SEC looks like they want to regulate?” he said. “It’s a question of what the SEC thinks of it being in its regulatory landscape…The SEC has still not coherently articulated what its regulatory goals are, and I think that’s a problem. The SEC should, as a regulatory agency, explain what it’s trying to accomplish. I don’t think it’s asking too much.”

See also  Warren expresses support for SEC's controversial SAB 121 bulletin

Source link

NFT Precedent prosecution SECs Set unsettling
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

NFT -turnover drops to $ 129.8 million, Avalanche Sales Surge 200%

2025-05-24

Alchemy acquires NFT Launchpad Heymint to speed up the development of Smart Wallet

2025-05-23

Delorean launches a car marketplace on the chains with Patrick Stewart

2025-05-23

Beratone NFT Avatars are now live on OpenSea

2025-05-23
Add A Comment

Comments are closed.

Top Posts

CFTC Warns Public of ‘Money Mule’ Scam Involving Cryptocurrency Disguised as Work-from-Home Opportunities

2024-05-15

BNB price gears up for a comeback: higher levels on target

2024-11-26

Cayman Islands Tighter become Crypto rules with mandatory licenses from 1 April

2025-03-10
Editors Picks

Vitalik Buterin says that crypto regulations lead to ‘anarcho-tyrannia’-this is what he means

2024-07-01

A flood of Ethereum Futures Exchange-Traded Funds could begin on Monday, according to Bloomberg ETF analyst

2023-10-01

CFTC investigates Crypto.com and Kalshi for Super Bowl -Event contracts

2025-02-05

XRP Price Fights for a Steady Climb: Will Bulls Prevail?

2024-11-11
About
About

Our mission is to develop a community of people who try to make financially sound decisions. The website strives to educate individuals in making wise choices about Cryptocurrencies, Defi, NFT, Metaverse and more.

We're social. Connect with us:

Facebook X (Twitter) Instagram Pinterest YouTube
Top Insights

Collect collaborations with Ecocreds to accelerate sustainability in chains

NFT -turnover drops to $ 129.8 million, Avalanche Sales Surge 200%

Hyperliquid’s market momentum pushes hype to new high

Get Informed

Subscribe to Updates

Get the latest news and Update from Free.cc about Crypto, Metaverse, NFT and more.

  • Contact
  • Terms & Conditions
  • Privacy Policy
  • DMCA
  • Advertise
  • BitcoinPlatform.com
© 2025 Free.cc - All rights reserved. Contact: info@free.cc

Type above and press Enter to search. Press Esc to cancel.

  • bitcoinBitcoin(BTC)$110,422.60-0.12%
  • ethereumEthereum(ETH)$2,651.881.61%
  • tetherTether USDt(USDT)$1.00-0.02%
  • rippleXRP(XRP)$2.420.78%
  • binancecoinBNB(BNB)$683.320.50%
  • solanaSolana(SOL)$180.372.50%
  • usd-coinUSDC(USDC)$1.00-0.01%
  • dogecoinDogecoin(DOGE)$0.2425701.84%
  • cardanoCardano(ADA)$0.812.40%
  • tronTRON(TRX)$0.2731790.29%
  • suiSui(SUI)$3.82-5.40%
  • hyperliquidHyperliquid(HYPE)$35.0515.09%
  • chainlinkChainlink(LINK)$16.591.94%
  • avalanche-2Avalanche(AVAX)$24.963.88%
  • stellarStellar(XLM)$0.3003471.03%
  • shiba-inuShiba Inu(SHIB)$0.0000152.04%
  • bitcoin-cashBitcoin Cash(BCH)$437.635.60%
  • hedera-hashgraphHedera(HBAR)$0.2025991.17%
  • unus-sed-leoUNUS SED LEO(LEO)$8.86-0.04%
  • the-open-networkToncoin(TON)$3.130.01%
  • polkadotPolkadot(DOT)$4.912.42%
  • litecoinLitecoin(LTC)$99.771.73%
  • moneroMonero(XMR)$392.06-0.86%
  • bitget-tokenBitget Token(BGB)$5.789.96%
  • pepePepe(PEPE)$0.00001510.83%
  • piPi(PI)$0.79-4.78%
  • daiDai(DAI)$1.00-0.01%
  • ethena-usdeEthena USDe(USDE)$1.00-0.06%
  • uniswapUniswap(UNI)$6.421.77%
  • bittensorBittensor(TAO)$458.95-2.84%
  • aaveAave(AAVE)$254.341.11%
  • nearNEAR Protocol(NEAR)$3.033.54%
  • aptosAptos(APT)$5.818.34%
  • ondo-financeOndo(ONDO)$1.011.19%
  • okbOKB(OKB)$52.83-0.29%
  • kaspaKaspa(KAS)$0.114524-0.41%
  • internet-computerInternet Computer(ICP)$5.612.68%
  • ethereum-classicEthereum Classic(ETC)$19.450.44%
  • official-trumpOFFICIAL TRUMP(TRUMP)$13.54-6.39%
  • gatechain-tokenGateToken(GT)$21.930.56%
  • render-tokenRender(RENDER)$5.164.81%
  • crypto-com-chainCronos(CRO)$0.0989160.05%
  • polygon-ecosystem-tokenPOL (prev. MATIC)(POL)$0.2494370.54%
  • vechainVeChain(VET)$0.0302161.31%
  • mantleMantle(MNT)$0.761.52%
  • ethenaEthena(ENA)$0.4169882.88%
  • worldcoin-wldWorldcoin(WLD)$1.5321.60%
  • usd1World Liberty Financial USD(USD1)$1.00-0.13%
  • artificial-superintelligence-allianceArtificial Superintelligence Alliance(FET)$0.9010.09%
  • arbitrumArbitrum(ARB)$0.4241670.99%
  • bitcoinBitcoin(BTC)$110,422.60-0.12%
  • ethereumEthereum(ETH)$2,651.881.61%
  • tetherTether USDt(USDT)$1.00-0.02%
  • rippleXRP(XRP)$2.420.78%
  • binancecoinBNB(BNB)$683.320.50%
  • solanaSolana(SOL)$180.372.50%
  • usd-coinUSDC(USDC)$1.00-0.01%
  • dogecoinDogecoin(DOGE)$0.2425701.84%
  • cardanoCardano(ADA)$0.812.40%
  • tronTRON(TRX)$0.2731790.29%
  • suiSui(SUI)$3.82-5.40%
  • hyperliquidHyperliquid(HYPE)$35.0515.09%
  • chainlinkChainlink(LINK)$16.591.94%
  • avalanche-2Avalanche(AVAX)$24.963.88%
  • stellarStellar(XLM)$0.3003471.03%
  • shiba-inuShiba Inu(SHIB)$0.0000152.04%
  • bitcoin-cashBitcoin Cash(BCH)$437.635.60%
  • hedera-hashgraphHedera(HBAR)$0.2025991.17%
  • unus-sed-leoUNUS SED LEO(LEO)$8.86-0.04%
  • the-open-networkToncoin(TON)$3.130.01%
  • polkadotPolkadot(DOT)$4.912.42%
  • litecoinLitecoin(LTC)$99.771.73%
  • moneroMonero(XMR)$392.06-0.86%
  • bitget-tokenBitget Token(BGB)$5.789.96%
  • pepePepe(PEPE)$0.00001510.83%
  • piPi(PI)$0.79-4.78%
  • daiDai(DAI)$1.00-0.01%
  • ethena-usdeEthena USDe(USDE)$1.00-0.06%
  • uniswapUniswap(UNI)$6.421.77%
  • bittensorBittensor(TAO)$458.95-2.84%
  • aaveAave(AAVE)$254.341.11%
  • nearNEAR Protocol(NEAR)$3.033.54%
  • aptosAptos(APT)$5.818.34%
  • ondo-financeOndo(ONDO)$1.011.19%
  • okbOKB(OKB)$52.83-0.29%
  • kaspaKaspa(KAS)$0.114524-0.41%
  • internet-computerInternet Computer(ICP)$5.612.68%
  • ethereum-classicEthereum Classic(ETC)$19.450.44%
  • official-trumpOFFICIAL TRUMP(TRUMP)$13.54-6.39%
  • gatechain-tokenGateToken(GT)$21.930.56%
  • render-tokenRender(RENDER)$5.164.81%
  • crypto-com-chainCronos(CRO)$0.0989160.05%
  • polygon-ecosystem-tokenPOL (prev. MATIC)(POL)$0.2494370.54%
  • vechainVeChain(VET)$0.0302161.31%
  • mantleMantle(MNT)$0.761.52%
  • ethenaEthena(ENA)$0.4169882.88%
  • worldcoin-wldWorldcoin(WLD)$1.5321.60%
  • usd1World Liberty Financial USD(USD1)$1.00-0.13%
  • artificial-superintelligence-allianceArtificial Superintelligence Alliance(FET)$0.9010.09%
  • arbitrumArbitrum(ARB)$0.4241670.99%