The NFT-only animated series starred Vitalik Buterin, Gary Vaynerchuk, and Hollywood A-listers.
Stoner Cats 2 LLC (SC2), the entity responsible for producing the Stoner Cats animated series, has consented to a cease-and-desist directive and additional remedial actions imposed by the United States Securities and Exchange Commission (SEC).
This decision comes after allegations of SC2 engaging in an unregistered offering of crypto asset securities in the form of nonfungible tokens (NFTs).
As per the SEC, SC2 marketed and sold over 10,000 NFTs, each priced at approximately $800.
This sale transpired in 35 minutes on July 27, 2021, with the proceeds allocated towards financing the production of the animated series.
These NFTs granted purchasers access to the Stoner Cats animated series, featuring a storyline centered around an older woman and her feline companions partaking in cannabis consumption.
Remarkably, the first of the six episodes premiered merely two days after the NFT sale.
The inception of the Stoner Cats project was instigated by actress Mila Kunis, who collaborated with established NFT creators.
The series boasted a star-studded cast, including Ashton Kutcher, Chris Rock, Dax Shepard, Gary Vaynerchuk, Jane Fonda, Michael Buble, Mila Kunis, Seth MacFarlane, and Vitalik Buterin.
In an official statement, the SEC asserted that SC2 had actively promoted the potential secondary market for the NFTs while implying that the creators’ credentials and the cast members’ prominence would elevate the NFTs’ value.
Furthermore, the NFTs were configured to grant SC2 a 2.5% royalty on each subsequent sale.
The SEC disclosed at least 10,000 secondary sales of the NFTs, collectively valued at more than $20 million.
In addition to consenting to the cease-and-desist order, SC2 will be subject to a civil penalty of $1 million.
To reimburse “injured investors,” a Fair Fund will be established for disgorgement purposes. SC2 has committed to destroying all NFTs within its possession or under its control.
It’s noteworthy that the company neither admitted to nor denied the allegations.
It is worth mentioning that the SEC’s initial case involving charges of unregistered securities sales against an NFT issuer emerged in August in Impact Theory.
