- The U.S. Securities and Exchange Commission continues to legislate via enforcement action as the latest charges leveled by the regulator indicate they are pushing to have non-fungible tokens labeled as securities.
The SEC’s order determined that the NFTs offered and sold to investors were investment contracts, “and therefore securities,” the release said. Based on this understanding, the SEC determined Impact Theory violated federal securities laws “by offering and selling these crypto asset securities to the public in an unregistered offering that was not otherwise exempt from registration.”
SEC Commissioners Hester Peirce and Mark Uyeda provided a statement in response to the ruling, outlining why they dissented from this decision by the SEC. They argued that even if the NFT sales “fit squarely within Howey,” the normal response to such a registration violation “is a rescission offer, which the company already made in the form of repurchase programs.”
“People are experimenting with a lot of different uses of NFTs,” they said. “Consequently, any attempt to use this enforcement action as precedent is fraught with difficulty.”
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