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Stoner Cats 2 LLC did not admit or deny wrongdoing in settling
charges it illegally raised $8.2 million in July 2021 by selling
10,320 NFTs for about $800 each, which sold out in 35 minutes.
It also agreed to destroy all NFTs in its possession. NFTs refer
to tokens that represent an asset such as a piece of digital
art.
A lawyer for Stoner Cats did not respond immediately to requests
for comment.
Wednesday's settlement is the SEC's second in its crackdown on
NFTs, following a settlement with Impact Theory LLC last month.
The SEC is targeting firms involved in the production or trading
of digital assets, saying they represent securities akin to
stocks or bonds that need to be overseen by the SEC.
Stoner Cats is an adult animated series about house cats that
become sentient after being exposed to their owner's medical
marijuana, which is used to alleviate early Alzheimer's
symptoms.
Six episodes were released from July 2021 to December 2022, and
the cast included several well-known actors like Jane Fonda,
Mila Kunis, Ashton Kutcher, Seth MacFarlane and Chris Rock.
The NFTs provided holders with exclusive access to watch "Stoner
Cats" online. Investors were told the NFTs were like a ticket,
and that "the more successful the show, the more successful your
NFT" will be.
"Stoner Cats wanted all the benefits of offering and selling a
security to the public but ignored the legal responsibilities
that come with doing so,” SEC official Carolyn Welshans said in
a statement.
Two of the five SEC commissioners, both Republicans, opposed the
action, saying in joint statement that the regulator should
instead lay out "some clear guidelines for artists and other
creators who want to experiment with NFTs".
(Reporting by Jonathan Stempel and Chris Prentice in New York,
editing by Deepa Babington)
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