SEC Files Charges Against NFT Project ‘Stoner Cats’

SEC Files Charges Against NFT Project ‘Stoner Cats’

SEC Files Charges Against , NFT Project ‘Stoner Cats’.

SEC Files Charges Against , NFT Project ‘Stoner Cats’.

'Stoner Cats,' which was launched in 2021, is an animated series that gets its funding by selling NFTs.

Over 10,000 NFTs were made, and only NFT owners could access the series.

The format also made it , "one of the first projects to use NFTs to create a community of holders who get to see behind the curtain as an animated series is made and interact directly with top-level Hollywood talent," according to the series' website.

The format also made it , "one of the first projects to use NFTs to create a community of holders who get to see behind the curtain as an animated series is made and interact directly with top-level Hollywood talent," according to the series' website.

Mila Kunis, Ashton Kutcher, Chris Rock, Jane Fonda, Seth MacFarlane and others voiced characters in the series.

Mila Kunis, Ashton Kutcher, Chris Rock, Jane Fonda, Seth MacFarlane and others voiced characters in the series.

Mila Kunis, Ashton Kutcher, Chris Rock, Jane Fonda, Seth MacFarlane and others voiced characters in the series.

Mila Kunis, Ashton Kutcher, Chris Rock, Jane Fonda, Seth MacFarlane and others voiced characters in the series.

On Sept.

13, the Securities and Exchange Commission (SEC) charged the show's creators "for an unregistered offering of NFTs," according to 'The Hollywood Reporter.'.

Regardless of whether your offering involves beavers, chinchillas or animal-based NFTs, under the federal securities laws, it’s the economic reality of the offering — not the labels you put on it or the underlying objects — that guides the determination of what’s an investment contract and therefore a security.

, Gurbir S.

Grewal, director of the SEC’s Division of Enforcement, via statement.

Here, the SEC’s order finds that 'Stoner Cats' marketed its knowledge of crypto projects, touted that the price of their NFTs could increase and took other steps that led investors to believe they would profit from selling the NFTs in the secondary market.

, Gurbir S.

Grewal, director of the SEC’s Division of Enforcement, via statement.

It’s therefore hardly surprising, as the order finds, that 'Stoner Cats' sold its entire supply of NFTs in just 35 minutes, generating proceeds of over $8 million, most of which were then resold — not held as collectibles — in the secondary market within months, Gurbir S.

Grewal, director of the SEC’s Division of Enforcement, via statement.

While Stoner Cats 2 LLC has not admitted any wrongdoing, it has agreed to a $1 million fine that it will use to create a fund to refund NFT buyers