- SEC alleged LA-based media firm for unregistered NFT sales.
- Impact Theory LLC agreed to pay over $6 Million as settlement charges.
The SEC’s regulatory crackdown on the crypto industry has reached the NFTs arena, and a media firm is the new victim. The Los Angeles-based Impact Theory LLC is accuse by the Securities. And Exchange Commission (SEC) of having raised nearly $30 Million by offering unregistered non-fungible tokens (NFTs).
LA-based Media Company Charged for Selling Unregistered NFTs
The financial watchdog of the United States SEC alleges that the company should have registered with the agency before the sale of said NFTs. Impact Theory has also agreed to pay the SEC over $6 Million as a settlement amount. It also signifies the first regulatory action on non-fungible tokens (NFTs).
The opening of the new avenue is like opening a new war front for the regulatory agency. The Securities and Exchange Commission has been trying to rebrand every crypto other than Bitcoin as a security. The slew of cases like the SEC vs. Ripple and lawsuits against the world’s biggest crypto exchange Coinbase are prime examples.
What does this Mean for the Digital Asset Industry?
Especially after the black swan event, the FTX-saga, the regulatory crackdown by the SEC over the crypto industry has increased by over 183%. In the agency’s defense, it is trying to safeguard customers, but Cardano founder Charles Hoskinson thinks that the reason for this crackdown is political.
Moreover, the agency has been scrutinizing NFT creators, and exchanges. Where they are traded to get some dirt on them. Even if Impact Theory has agreed to pay the monetary penalty and to a cease and desist order, the company is disappoint in the action.
The agency had alleged that Impact Media, to create the next Disney, sold three-tier NFTs, aka Founder’s Keys. Investors were told to view them as investments in the business. And holders would get handsome value for holding. This violates the laws and, hence, the case and settlement.
Industry experts are already worried about the ongoing regulatory action on various crypto entities. And the naming of select tokens to be classified as securities. With the addition of this new avenue, NFTs, the industry might suffer more.
Upcoming Bills to Fill Regulatory Void in the U.S.
The United States still needs to regulate crypto, and with significant jurisdictions diligently working on modules to regulate digital assets, America has arrived very late to the party. The lawmakers have drafted and presented four different bills, which, if passed, could fill the regulatory void prevailing in the United States.
The Financial Innovation and Technology for the 21st Century Act (FITCA) tries to classify commodities. And securities while clarifying the role of the SEC and Commodities Futures Trading Commission (CFTC). The Responsible Financial Innovation Act (RFIA) pushes the SEC and CFTC to work closely. At the same time, the taxation part is left with the Federal Reserve.
The Digital Asset Market Structure Bill (DAMS) hints at a certification process for classifying securities. And commodities and registering crypto exchanges as alternative trading systems (ATS). The Digital Commodity Exchange Act (DCEA) also treats stablecoins and other aspects of digital assets differently.
Industry experts agree that the current regulatory scenario surrounding crypto. And digital assets needs to be more comprehensive in the United States. The regulators are trying enforcement by action approach, creating a hostile scenario. If these bills are pass, the regulatory scenario around digital assets would be precise and the industry would prosper.
