SEC Says NFTs Sold by an LA-based Entertainment Firm Are Securities
Published on August 29, 2023 at 12:18AM
In an enforcement action announced on Monday, the Securities and Exchange Commission charged Los Angelesâ"based entertainment company Impact Theory with conducting an unregistered offering of securities via non-fungible tokens, or NFTs. From a report: As the SEC expands its definition of which types of crypto assets qualify as securities, the case breaks new ground by determining that NFTs fall under the agency's jurisdiction. "Absent a valid exemption, offerings of securities, in whatever form, must be registered," Antonia Apps, director of the SEC's New York Regional Office, said in a statement. The question of whether NFTs qualify as securities has remained open for several years. Before the SEC weighed in, a lawsuit in the U.S. District Court for the Southern District of New York remained the highest-profile case to tackle the issue, with a group of NFT collectors suing Dapper Labs. The plaintiffs alleged that the crypto firm had earned hundreds of millions of dollars by selling unregistered securities. Although Dapper Labs motioned for the case to be dismissed last year, a judge ruled in February that it could move forward, concluding that it was "plausible" NFTs could qualify as securities.
Published on August 29, 2023 at 12:18AM
In an enforcement action announced on Monday, the Securities and Exchange Commission charged Los Angelesâ"based entertainment company Impact Theory with conducting an unregistered offering of securities via non-fungible tokens, or NFTs. From a report: As the SEC expands its definition of which types of crypto assets qualify as securities, the case breaks new ground by determining that NFTs fall under the agency's jurisdiction. "Absent a valid exemption, offerings of securities, in whatever form, must be registered," Antonia Apps, director of the SEC's New York Regional Office, said in a statement. The question of whether NFTs qualify as securities has remained open for several years. Before the SEC weighed in, a lawsuit in the U.S. District Court for the Southern District of New York remained the highest-profile case to tackle the issue, with a group of NFT collectors suing Dapper Labs. The plaintiffs alleged that the crypto firm had earned hundreds of millions of dollars by selling unregistered securities. Although Dapper Labs motioned for the case to be dismissed last year, a judge ruled in February that it could move forward, concluding that it was "plausible" NFTs could qualify as securities.
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