The Securities and Exchange Commission (SEC) recently imposed a hefty $1 million fine on the creators of the popular animated series “Stoner Cats.” This penalty follows their sale of millions of dollars worth of non-fungible tokens (NFTs) to fund the show’s development.
In 2021, the creators managed to raise an impressive $8.2 million through the sale of NFTs to investors, enabling them to bring this nine-episode show to life. The storyline revolves around a group of cats who gain sentience after consuming their owners’ marijuana stash.
Unfortunately, Stoner Cats 2 LLC, the company responsible for the NFT offering, failed to register the sale with regulators and thus violated securities laws. The SEC emphasizes that regardless of whether the offering involves real animals or animal-based NFTs, compliance with federal securities laws is crucial. The economic reality of the offering, not just its labels or underlying objects, determines whether it qualifies as an investment contract and thus a security.
Gurbir Grewal, the SEC’s head of enforcement, warns, “Whether you’re dealing with beavers, chinchillas, or animal-centric NFTs, it’s important to understand that the true nature of the offering is what matters from a securities perspective.”
The collaboration between actress Mila Kunis’ production company, Orchard Farm Productions, and the creators of Stoner Cats paved the way for this unique project and its associated NFT offering.
Despite this setback, the creators of Stoner Cats remain committed to pushing creative boundaries and delivering innovative and captivating content to their audience. Through responsible compliance and strategic partnerships, they will continue to bring unconventional stories to life in the evolving landscape of entertainment. Stay tuned for more exciting developments!
SEC Settlement for Stoner Cats 2: Fine, Money Return, and NFT Destruction
In a recent settlement reached with the Securities and Exchange Commission (SEC), the creators of the popular show Stoner Cats 2 have agreed to pay a hefty $1 million fine. Additionally, they are obligated to return money to investors and destroy any remaining Non-Fungible Tokens (NFTs) in their possession.
Despite this settlement, it is important to note that the company involved did not admit to any wrongdoing. Furthermore, it is worth mentioning that actress Mila Kunis, who played a role in the show, was not implicated in the court filings.
The release of the NFTs, featuring adorable cat characters from the show, took place on July 27, 2021. Surprisingly, all 10,000 NFTs were snatched up within a mere 35 minutes, according to the SEC. The funds acquired from this sale were utilized for the production of the series.
Stoner Cats 2 boasted an impressive lineup of actors providing voices for its characters, including Kunis, her husband Ashton Kutcher, Chris Rock, and Jane Fonda. Initially, the episodes were exclusively accessible to NFT holders before being made available to the general public.
As part of the NFT sale, the company had retained specific resale rights, allowing them to collect 2.5% of any secondary sales revenue, as disclosed by the SEC. This generated income was then used to compensate the actors and other creative talents involved in the production.
The settlement denotes a significant resolution following regulatory concerns surrounding the show and its associated NFTs. While financial penalties have been imposed and NFTs destroyed, there is no direct indication of culpability on Kunis’ part. As details continue to unfold, it remains to be seen how this settlement will shape the future of Stoner Cats 2.