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Read more: SEC Cracks Down On Stoner Cats 2 LLC’s $8 Million NFT Offering
The enforcement action follows an investigation into the unregistered sale of NFTs linked to the animated series Stoner Cats. The series, backed by actress Mila Kunis with voices from Kunis, Ashton Kutcher, Chris Rock, and Ethereum co-founder Vitalik Buterin, sold 10,320 NFTs at $800 each, raising $8.2 million.
The SEC found that the Stoner Cats NFT offering had been the sale of crypto asset securities in violation of the Securities Act. To this end, Stoner Cats 2 LLC will have to pay a fine of $1 million and create a “fair fund” for reimbursement to affected investors. Those who held or sold Stoner Cats NFTs prior to September 12, 2023, will be compensated through the fair fund payment, though claims are paid only if more than $20.
To qualify for reimbursement, investors must submit validated claims, and the claims process will include strict checks for compliance with U.S. sanctions. Any remaining funds will be directed to the U.S. Treasury. A fund administrator will oversee the distribution and ensure transparency through regular reports.
The Securities and Exchange Commission’s ruling had imposed restrictions on the Stoner Cats NFTs in the marketplaces of OpenSea and Blur, among others. The collection has not been delisted, but OpenSea confirmed that users can no longer purchase, sell, or transfer the Stoner Cats NFTs. Users can still view and search the listings.
This is the second NFT project the SEC has taken on for similar violations after it cracked down on the podcast studio Impact Theory in August 2023.
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