Bad news for the creators of 2021’s ‘Stoner Cats’ NFTs: US regulator the Securities and Exchange Commission (SEC) is not – ahem – feline so good about their approach.
In fact, it has charged Stoner Cats 2 LLC with “conducting an unregistered offering of crypto asset securities” with their NFTs, which raised around $8m to finance an animated web series.
Take careful note of the explanation given for the charges.
“The order finds that both before and after Stoner Cats NFTs were sold to the public, SC2’s marketing campaign highlighted specific benefits of owning them, including the option for owners to resell their NFTs on the secondary market,” explained the SEC.
“In addition, the order finds that, as part of the marketing campaign, the SC2 team emphasized its expertise as Hollywood producers, its knowledge of crypto projects, and the well-known actors involved in the web series, leading investors to expect profits because a successful web series could cause the resale value of the Stoner Cats NFTs in the secondary market to rise.”
We can think of a few music-related NFT offerings from the past couple of years that don’t sound so different in their approach.
Stoner Cats 2’s creators have agreed to a cease-and-desist order and to pay a fine of $1m, as well as creating a fund to return monies to investors.
It follows a similar resolution (but to the tune of $6.1m) in recent charges against another NFTs firm, Impact Theory.