In a first, the SEC says NFTs offered by an L.A.-based entertainment firm are securities. Here’s how that could ripple throughout the industry

Gary Gensler (Credit: Andrew Harrer—Getty Images)

In an enforcement action announced on Monday, the Securities and Exchange Commission charged Los Angeles–based entertainment company Impact Theory with conducting an unregistered offering of securities via non-fungible tokens, or Ethereum.

While Impact Theory did not admit or deny the SEC’s allegations, it agreed to a cease-and-desist order, as well as a $6.1 million fine in disgorgement, prejudgment interest, and a civil penalty. It will also return all proceeds from NFT sales to investors.