The Securities and Exchange Commission has charged Impact Theory, a blockchain-related company, with violating the federal securities laws in connection with the issuance and sale of digital assets. According to the SEC, the company issued unregistered digital tokens, and improperly transferred the tokens to buyers, several of whom are not accredited investors.
The SEC alleges that Impact Theory issued “utility tokens” and sold them to investors without registering the tokens as securities, which is a violation of the Securities Act of 1933. In addition, the company allegedly did not follow the requirements for selling securities to non-accredited investors, which would require the company to provide disclosure documents to the buyers.
The SEC stated that the actions of Impact Theory “illustrate the necessity for market participants to comply with the registration and disclosure requirements of the federal securities laws when dealing in digital assets.” The agency has ordered the company to cease and desist from committing further violations and to pay a civil penalty of $100,000. Impact Theory has agreed to a settlement with the SEC, but neither admits nor denies the SEC’s findings.