Stoner Cats NFTs Creator Agrees to $1 Million SEC Penalty
Reading Time: 2 minutesStoner Cats NFTs creator has agreed to pay the Securities and Exchange Commission $1 million for selling unregistered securities
The creator also agreed to stop selling the NFTs and return investors’ money
The NFT project is linked to popular actress Mila Kunis
Stoner Cats NFTs creator Stoner Cats 2 LLC has agreed to part with $1 million as a penalty for offering unregistered securities in the form of digital collectibles. The Mila Kunis-linked NFT project also agreed to stop any NFT activities, return funds to investors and burn any of the project’s collectibles they may still have. The settlement agreement comes two weeks after another NFT project agreed to pay the SEC over $6 million for similar charges, an indication that some web3 projects may be knowingly breaking securities laws.
Cats ‘Smoking’ Cannabis
In its charges, the Securities and Exchange Commission (SEC) said that Stoner Cats creators sold digital collectibles as a pass to a virtual event featuring cats being exposed to cannabis smoke. The show features the voices of popular actors such as Chris Rock and Mila Kunis’ husband Ashton Kutcher, although the SEC didn’t charge individual celebrities involved.
According to the SEC, the benefits offered by an NFT determine whether the collectible is a security or not. It added that registering a security helps investors “make informed investing decisions,” adding that “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.”
NBA Top Shot Also Accused of Securities Law Violation
The SEC has been increasing its surveillance of blockchain-focused firms and projects for securities law violations. Some of the projects charged for offering unregistered securities include blockchain security firm Quantstamp, Ripple and LBRY. NFT projects like NBA Top Shot are also facing securities charges.
With the SEC’s continued win against NFT projects, web3 projects should start evaluating their products for securities laws violations before offering them to the public.
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Filed under: Bitcoin - @ September 14, 2023 10:21 am