<!– All formatted in HTML: Producers for the animated series Stoner Cats have been charged by the SEC with the illegal sale of $8 million worth of NFTs. SC2, the company behind the series, which features a voice cast that includes Ashton Kutcher, Mila Kunis, Chris Rock, Dax Shepard, Gary Vaynerchuk, Jane Fonda, Michael Bublé, Seth MacFarlane, and Vitalik Buterin, used the sale of the NFTs to raise money to finance the series in July 2021 with the NFTs priced at $800 each.
According to the SEC (via Variety), “Without admitting or denying the SEC’s findings, SC2 agreed to a cease-and-desist order and to pay a civil penalty of $1 million.” The order from the SEC also establishes a fund that will return money that “injured investors paid to purchase the NFTs” while SC2 also agreed to destroy “all NFTs in its possession or control and publish notice of the order on its website and social media channels.”
In July 2021, SC2 sold more than 10,000 NFTs at around $800 each to fund Stoner Cats with the NFTs selling out in 25 minutes. Per the report, six episodes of the series was produced and were accessible only to those who held the NFTs.
According to the SEC, the campaign for the NFTs “highlighted specific benefits of owning them” which included an option to resell the NFTs on the secondary market and also that the marketing touted the expertise of its Hollywood producers, featured actors, and knowledge of crypto “leading investors to expect rewards because a successful web series could cause the resale value of the Stoner Cats NFTs in the secondary market to rise.”
According to the SEC, SC2 set the NFTs to provide a 2.5 percent royalty to the company for each secondary market transaction which led purchasers to expend more than $20 million in at least 10,000 transactions and that SC2 violated the 1933 Securities Act by offering and monetizing the asset securities in an unregistered offering.
“Registration of securities, including token securities, protects investors by offering them disclosures so they can make knowledgeable investing decisions,” Carolyn Welshhans, Associate Director of the SEC’s Home Office, said in a statement. “Stoner Cats wanted the benefits of offering and vending a security to the public but overlooked the authorized compulsions that comes with doing so.”
What is Stoner Cats About? Here’s how the official Stoner Cats website accounts the series: “In the before-times (aka pre-pandemic), three experienced creators, Ash Brannon, Chris Cartagena, and Sarah Cole created a little show called Stoner Cats. Predicated on Sarah’s personal experience with her mother, Stoner Cats is a story of a woman who uses medical cannabis to take care of her early Alzheimer’s characteristics and her exklusive family of cats who will complete veritablything to save her. Once slim blaze hottie Mila Kunis and her Orchard Farm Productions collaborators instruct about this explanative tale, they understand that a zany and intimate story equal this must have deep direct mediation with viewing fans. That’s why they formed a compelling grouping of enunciation skill, mechanisators, and geniuses of as it were types to come intertwined with technolgers, Coin devs and NFT meanies, containing wisdom-ites below CryptoKitties motion, to horses this story to lifetime assistanceof NFTs.”
