NFT

SEC Charges Stoner Cats NFT Creator with Unregistered Securities Sale

Stoner Cats 2 LLC (SC2), the entity responsible for the “Stoner Cats” animated series,

has reached an agreement with the United States Securities and Exchange Commission (SEC) following charges of conducting an unregistered offering of crypto-asset securities in the form of nonfungible tokens (NFTs).

According to the SEC, SC2 sold over 10,000 NFTs at an average price of $800 each.

The sale, which lasted 35 minutes, took place on July 27, 2021,

with the proceeds being utilized to finance the production of the series.

These NFTs granted purchasers access to view the “Stoner Cats” animated series,

featuring an elderly woman and her feline companions engaging in cannabis consumption.

The premiere of the first episode occurred just two days after the NFT sale.

As part of the SEC’s enforcement actions, SC2 has agreed to comply with a cease-and-desist order and implement additional measures.

This development underscores the regulatory scrutiny surrounding the sale of NFTs and the need for compliance with securities laws.

A Stoner Cats promo.

The Stoner Cats project, which gained attention for its NFT offering,

was spearheaded by renowned actress Mila Kunis.

Collaborating with established NFT creators, Kunis brought together an impressive ensemble cast for the animated series.

Alongside Kunis, the cast included Ashton Kutcher, Chris Rock, Dax Shepard, Gary Vaynerchuk, Jane Fonda, Michael Bublé, Seth MacFarlane, and Vitalik Buterin.

The star-studded lineup added to the buzz surrounding the Stoner Cats project,

attracting fans and enthusiasts eager to engage with the NFTs and the unique animated series.

SEC Charges SC2 for Misleading Marketing of Stoner Cats NFTs and Imposes Penalties

In response to the charges brought by the Securities and Exchange Commission (SEC),

SC2, the company behind the Stoner Cats NFTs, has agreed to a cease-and-desist order and other penalties.

The SEC stated that SC2 marketed the NFTs by suggesting their potential for secondary sales and implying that the involvement of prominent actors and creators would increase their value.

SC2 also implemented a 2.5% royalty on every secondary sale,

resulting in over 10,000 secondary sales worth more than $20 million, according to the SEC.

Apart from the cease-and-desist order, SC2 will pay a civil penalty of $1 million.

Additionally, a fair fund will be established to compensate “injured investors” through disgorgement.

As part of the settlement, SC2 will destroy all NFTs under its possession or control.

It’s important to note that SC2 neither admitted nor denied the charges.

This case marks the SEC’s second instance of charging an NFT issuer with unregistered securities sales, following its previous case against Impact Theory in August.

Finally, The regulatory scrutiny surrounding NFTs continues to evolve as authorities address potential violations and protect investors’ interests.

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