SEC goes after Stoner Cats NFTs; NFT ‘Sleepdrops’ drains $11.5M from Ethereum Users

The Securities and Exchange Commission (SEC) has launched an investigation into the Stoner Cats NFT project, which features animated cats voiced by celebrities such as Ashton Kutcher, Jane Fonda, and Mila Kunis. The project, which raised $8.4 million in a matter of minutes in July, has been accused of violating securities laws by selling unregistered tokens that could be considered securities.

The SEC probe was first reported by The Wall Street Journal, which cited anonymous sources familiar with the matter. According to the report, the SEC is looking into whether the Stoner Cats NFTs constitute investment contracts, which would require them to comply with federal securities regulations. The SEC is also examining whether the project misled investors about its financial prospects and the involvement of the celebrities.

The Stoner Cats NFT project is a spin-off of a planned animated series created by Kutcher and Kunis, in which they voice marijuana-smoking felines who live with an elderly woman suffering from dementia, played by Fonda. The project sold 10,420 NFTs for 0.35 ether each (about $800 at the time), which gave buyers access to watch the first episode of the series and future episodes. The NFTs also came with exclusive perks, such as voting rights on the direction of the show and access to a Discord channel where the celebrities would interact with the fans.

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However, the project faced several challenges since its launch, including technical glitches that prevented some buyers from claiming their NFTs, delays in releasing the first episode, and negative feedback from some viewers who found the show offensive or unfunny. Moreover, some critics have argued that the Stoner Cats NFTs are more than just digital collectibles or fan tokens, but rather securities that promise future returns based on the success of the show and the popularity of the celebrities.

The SEC has not commented on the investigation, nor has it issued any formal charges or subpoenas against the project or its creators. However, the probe could have significant implications for the booming NFT market, which has seen billions of dollars’ worth of transactions in recent months. The SEC has been increasing its scrutiny of the crypto space, especially in relation to tokens that could be deemed securities. In December 2020, the SEC sued Ripple Labs, the company behind the XRP cryptocurrency, for allegedly selling $1.3 billion worth of unregistered securities. The case is still ongoing and could set a precedent for how the SEC regulates other crypto projects.

The Stoner Cats NFT project has not issued any official statement regarding the SEC probe, but Kutcher tweeted on Friday that he was “proud” of the project and thanked the fans for their support. He also shared a link to a medium post by one of the project’s developers, who defended the legality and legitimacy of the Stoner Cats NFTs. The post argued that the NFTs are not securities, but rather “utility tokens” that grant access to a digital service or product. The post also claimed that the project did not make any false or misleading statements to investors, and that it complied with all applicable laws and regulations.

NFT ‘Sleepdrops’ drains $11.5 million from Ethereum Users

A new scam involving non-fungible tokens (NFTs) has been exposed, costing Ethereum users more than $11.5 million in total. The scheme, dubbed ‘sleepdrops’, involves creating fake NFTs that look like popular collections, such as CryptoPunks or Bored Ape Yacht Club, and listing them for sale on secondary markets. However, these NFTs are not minted on the blockchain, but rather generated by a malicious website that tricks buyers into sending ETH to a fraudulent address.

The scam works by exploiting a feature of some NFT marketplaces, such as OpenSea, that allows users to view and bid on any NFT, even if it is not officially verified or listed by the creator. The scammers use a website called, which mimics the interface of popular NFT platforms, to generate fake NFTs with random attributes and metadata.

They then use bots or fake accounts to post these NFTs on social media, forums, and Discord channels, claiming that they are rare or valuable pieces from well-known collections. They also provide a link to the website, where potential buyers can see the NFT and its details.

However, when a user clicks on the ‘buy now’ button on the website, they are redirected to a phishing page that asks them to enter their wallet address and the amount of ETH they want to send. The page also displays a QR code and a fake transaction hash, to make it seem like the purchase is legitimate. However, once the user sends the ETH, they receive nothing in return. The scammers then withdraw the funds from their address and move them to other wallets or exchanges.

According to a report by security firm CipherTrace, the sleepdrops scam has been active since at least August 2021, and has drained more than $11.5 million from unsuspecting Ethereum users. The report also identified 15 different fraudulent addresses associated with the scheme, which have received over 3,800 transactions from more than 2,500 victims. The largest single transaction was worth $1.1 million, while the average transaction was worth $3,000.

Some of the common signs of NFT phishing scams are:

The offer is too good to be true. For example, a scammer may claim to sell a rare or valuable NFT for a fraction of its market price or offer a free NFT in exchange for a small fee or personal information.

The source is not trustworthy. For example, a scammer may use a fake domain name that resembles a reputable platform or marketplace, or a spoofed email address that mimics a legitimate sender.

The communication is urgent or pressuring. For example, a scammer may create a sense of scarcity or fear by claiming that the offer is limited or expiring soon, or that the user’s account or funds are at risk.

The language is poor or inconsistent. For example, a scammer may use grammatical errors, spelling mistakes, or unfamiliar terms that indicate a lack of professionalism or authenticity.

To protect yourself from NFT phishing scams, you should always:

Verify the identity and reputation of the source. For example, you can check the domain name, email address, social media profile, or online reviews of the platform or seller before engaging with them.

Avoid clicking on suspicious links or attachments. For example, you can hover over the link to see the actual URL or scan the attachment with an antivirus software before opening it.

Use a secure and updated browser and device. For example, you can enable the security features and updates of your browser and device to prevent malware infections and data breaches.

Use a reputable and secure wallet and platform. For example, you can choose a wallet and platform that have strong encryption, authentication, and customer support features to safeguard your funds and transactions.

NFT phishing scams are not only harmful to individuals, but also to the whole NFT ecosystem. They undermine the trust and confidence of the users and damage the reputation and value of the digital art. Therefore, it is important to be vigilant and cautious when dealing with NFTs and to report any suspicious activity to the relevant authorities or platforms.

CipherTrace warned that the sleepdrops scam is likely to continue, as the scammers can easily create new fake NFTs and addresses. The firm advised users to be cautious when buying NFTs from unverified sources, and to always check the authenticity of the NFTs on the blockchain before sending any funds. The firm also recommended users to use reputable NFT platforms that have proper verification and security measures in place.

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