The first-ever NFT-related enforcement motion filed by the corporation has received criticism from two of the Securities and Alternate Fee’s (SEC) five commissioners, who have publicly disagreed with it. Hester Peirce and Mark Uyeda, commissioners, disagreed with the securities regulator’s decision to fine Impression Idea for allegedly raising millions through an unregistered offering of cryptocurrency securities.
Impression Idea, a Los Angeles-based entertainment company, was sued by the SEC for raising $30 million from investors by marketing NFTs known as “Founder’s Keys.” The company allegedly persuaded investors to see purchasing a Founder’s Key as an investment in its business that would eventually bring them a substantial profit.
Impression Idea was accused of breaching federal securities laws by offering securities without first registering them with the firm after the SEC determined that the NFTs it had sold were actually funding contracts and securities. Since then, the leisure agency has consented to resolve the enforcement motion by paying a civil penalty of nearly $6 million.
However, SEC commissioners Peirce and Uyeda believe that the matter involving Impression Idea did not fall under their purview. They said that although the problems with investors buying the company’s NFTs on the basis of hype were real, the country’s top securities regulator shouldn’t have taken punitive action.
The Commissioners stated in a press release earlier today that “We don’t routinely carry enforcement actions against those who promote watches, artwork, or collectibles along with ambiguous guarantees to build the model and thereby enhance the resale value of these tangible goods.”
Each commissioner believes that the corporation should discuss its approach to NFT regulation. Despite the Howey ruling’s success, they also questioned the decision to employ securities laws to protect NFT consumers.