Non-fungible token (“NFT”) issuers and the NFT market will want to take note of the US Securities and Exchange Commission’s (“SEC”) statement this week that NFTs issued by Impact Theory, LLC were “securities” under US federal securities law and the sale of those NFTs without registration or reliance on an exemption from the registration requirements violated federal securities law. The publication of this settlement order highlights the SEC’s continued digital enforcement policy and represents the first time the SEC has charged an NFT issuer with selling unregistered securities.

In this Legal Update, we provide a snapshot of the settlement and dissents from two SEC Commissioners and distill some key takeaways for the market.

Read our Legal Update.