The United States Securities and Exchange Commission (SEC) has charged the creators of the project Stoner Cats with selling unregistered securities around the launch of NFTs in 2021.
Stoner Cats 2 LLC
agreed to a cease-and-desist order and will pay a $1 million civil penalty without admitting fault
also destroy any NFTs that it still holds, and establish a "Fair Fund" to refund investors who purchased the NFTs in the primary sale.
Stoner Cats was created by Orchard Farm Productions, the production studio of actress Mila Kunis, who also voiced one of the feline characters in the cartoon series.
company raised $8 million in the sale
NFTs as entrance tickets to show
web series in which five cats—and their owner—get high.
voices of big-name celebrities
shton Kutcher, actress Jane Fonda, "Family Guy" creator Seth McFarlane, and comedian Chris Rock
the NFTs sold out in just 35 minutes
and the company had "highlighted specific benefits of owning them," including the ability to resell them on secondary markets—which would earn the company a royalty fee.
“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,”
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