Stoner Cats NFT Series Fined $1 Million for Misleading Investors
An NFT-backed animated series production called Stoner Cats, featuring renowned actors such as Ashton Kutcher, Mila Kunis, Chris Rock, Dax Shepard, Jane Fonda, and Seth MacFarlane, has been fined $1 million by the Securities and Exchange Commission (SEC) for deceiving investors. The production, which funded its operations through the sale of $8 million in non-fungible tokens (NFTs) in 2021, was accused of misappropriating those funds and conducting an unregistered offering of crypto asset securities.
According to the SEC, the production entity Stoner Cats 2 LLC will now be required to pay a civil penalty of $1 million and adhere to a cease-and-desist order, without admitting or denying the findings. In addition, a fund will be established to return money to affected investors, and all NFTs associated with the series will be destroyed as per the SEC’s order. The production must also publicly announce the regulatory order.
Mila Kunis, who is listed on the production’s website as a member of both the production team and blockchain team, has recently faced public criticism alongside Ashton Kutcher for their support of former That ’70s Show castmate Danny Masterson, who was convicted of felony rape and sentenced to three decades in prison. The couple subsequently issued apologies for their stance on the matter.
NFTs and cryptocurrency gained significant popularity within Hollywood and society at large, reaching a peak with Super Bowl commercials featuring high-profile individuals like Larry David and Matt Damon. However, the tide has turned as recent legal actions have targeted celebrities endorsing these tech-backed equities.
The SEC’s order revealed that Stoner Cats 2 LLC had sold over $10,000 NFTs for $800 each in July 2021, with the entire sale being completed within a mere 35 minutes. Following the sale, the production’s marketing campaign highlighted the specific benefits of owning them, including the possibility of reselling the NFTs on the secondary market. The SEC deemed this behavior a violation of the Securities Act of 1933, stating that the production team’s expertise, involvement of well-known actors, and knowledge of crypto projects led investors to anticipate profits from the NFTs’ resale value.
As the backlash against NFTs and cryptocurrency endorsements intensifies, stars find themselves entangled in investor lawsuits. This latest fine by the SEC serves as a reminder that regulatory bodies are paying close attention to the actions of those involved in NFT-related ventures.
In conclusion, the Stoner Cats NFT series has been fined $1 million by the SEC for misleading investors, resulting in the production entity agreeing to a monetary penalty, a cease-and-desist order, and the establishment of a fund to reimburse affected investors. The NFTs associated with the series will be destroyed, and a public notice regarding the SEC’s order will be posted. This development reflects the increasing scrutiny faced by celebrities endorsing NFTs and cryptocurrency, amidst a growing backlash and legal challenges in the industry.
