Summary
- Ashton Kutcher and Mila Kunis’s NFT-funded animated series Stoner Cats has been fined $1 million by the SEC for misleading investors.
- The SEC found that Stoner Cats violated the Securities Act of 1933 by offering unregistered crypto asset securities to the public.
- The company behind Stoner Cats emphasized the benefits of acquiring NFTs and the involvement of well-known actors to attract investors and raise the resale value of the NFTs.
A new report from Entertainment Weekly reveals that Ashton Kutcher and Mila Kunis’s NFT-funded animated series Stoner Cats has been fined $1 million dollars by the Securities and Exchange Commission (SEC) for misleading its investors.
The adult-animated series Stoner Cats was created by Ash Brannon, Chris Cartagena, and Sarah Cole and stars Kutcher, Kunis, Chris Rock, Jane Fonda, and others. The show follows a group of house cats who gain a higher consciousness after being exposed to medical marijuana.
According to the SEC, the animated series sold over 10,000 NFTs and earned a profit of $8 million to finance Stoner Cats. In a press release, the SEC states that these actions violated the Securities Act of 1933 by “offering and selling these crypto asset securities to the public in an unregistered offering that was not exempt from registration.”
Reports additionally claimed that the team behind the animated series focused on the benefits of acquiring one of its NFTs, with one example of exploits being the option to later re-sell the NFT for a greater profit. The SEC’s statement added that it also “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.”
The SEC additionally concluded that the company had also constructed the NFTs in a way that ensured it provided a 2.5 percent royalty every time that the original was later bought online, resulting in the buyer spending more than $20 million on a minimum of 10,000 transactions.
The SEC Stated That “SC2 Agreed to a Cease-And-Desist Order and To Pay a Civil Penalty of $1 Million”
The Securities and Exchange Commission stated, “Without admitting or denying the SEC’s findings, SC2 agreed to a cease-and-desist order and to pay a civil penalty of $1 million. The order establishes a Fair Fund to return monies that injured investors paid to purchase the NFTs. SC2 also agreed to destroy all NFTs in its possession or control and publish notice of the order on its website and social media channels.”
Their statement added, “Registration of securities, including crypto asset securities, protects investors by providing them with disclosures so they can make informed investing decisions. Stoner Cats wanted all the benefits of offering and selling a security to the public but ignored the legal responsibilities that comes with doing so.”
The website for the adult animated series stated that after “Mila Kunis and her Orchard Farm Productions heard this story, they knew that a hilarious and intimate story like this needed to have deep direct engagement with its audience. So they formed a formidable collective of voice talent, animators, and creatives of all kinds to come together with technology and NFT experts (including the brilliant minds behind CryptoKitties) to bring this story to life using NFTs.”
The site added that, “Stoner Cats NFTs gave holders access to the content creators of the show, making it one of the first projects to use NFTs to create a community of holders who get to see behind the curtain as an animated series is made and interact directly with top-level Hollywood talent.”
