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Stoner Cats 2 LLC (SC2), the company behind the Stoner Cats animated series, has agreed to a cease-and-desist order and other measures imposed by the United States Securities and Exchange Commission (SEC) after being charged with conducting an unregistered offering of crypto asset securities in the form of nonfungible tokens (NFTs).\u00a0<\/p>\n
According to the SEC, SC2 sold more than 10,000 NFTs for about $800 a piece. The sale took 35 minutes and occurred on July 27, 2021. Proceeds were used to fund the series. The NFTs allowed purchasers to view the Stoner Cats animated series, which revolved around an elderly woman and her cats consuming cannabis. The first episode of six premiered two days after the NFT sale. <\/p>\n The Stoner Cats project was spearheaded by actress<\/a> Mila Kunis, who teamed up with established NFT creators. The series\u2019 cast consisted of Ashton Kutcher, Chris Rock, Dax Shepard, Gary Vaynerchuk, Jane Fonda, Michael Buble, Mila Kunis, Seth MacFarlane and Vitalik Buterin.<\/p>\n Related: SEC chair issues warning to celebrities promoting crypto amid latest enforcement action<\/a><\/em><\/strong><\/p>\n The SEC said<\/a> in a statement that SC2 marketing the potential secondary market for the NFTs and implied that the qualifications of the creators and prominence of the actors would cause the NFTs to rise in value. The NFTs were configured so that SC2 received a 2.5% royalty on every secondary sale. There were at least secondary 10,000 sales of the NFTs worth more than $20 million, the SEC said.<\/p>\n SEC settled its first enforcement action involving PFP NFTs. SEC alleges each uniquely generated \u201cStoner Cat\u201d itself to be a \u201ccrypto asset security in the form of a non-fungible token.\u201d Mechanics of the offering were similar to most popular PFP projects. Some of my takeaways\u2026 \/1<\/p>\n \u2014 Mike Selig (@MikeSeligEsq) September 13, 2023<\/a><\/p><\/blockquote>\n Besides agreeing to the cease-and-desist order, SC2 will pay a civil penalty of $1 million. A Fair Fund will be created for disgorgement to reimburse \u201cinjured investors.\u201d SC2 will destroy all NFTs in its possession or control. The company did not admit to or deny the charges. <\/p>\n\n