Stoner Cats fine overview:
- Who: Stoner Cats 2 LLC was fined $1 million by the United States Securities and Exchange Commission.
- Why: Stoner Cats was found to have sold $8.2 million in securities without registering the sale of the securities and was fined for the action.
- Where: The NFTs were sold across the United States.
Stoner Cats 2 LLC was fined $1 million after it sold $8.2 million in non-fungible tokens (NFTs) that were considered securities without registering the sale with the United States Securities and Exchange Commission.
The company sold 10,320 Stoner Cats NFTs within 35 minutes of going public with the sale on July 27, 2021. Then, between July 27, 2021, and June 2, 2022, there were at least 10,475 sales on the secondary market of Stoner Cat NFTs and Stoner Cats 2 earned 2.5% royalty for each secondary transaction.
Stoner Cats is an adult animated TV show about a group of pet cats that become sentient after exposure to their owner’s medical marijuana.
“In 2021, SC2 financed the show by offering and selling NFTs to the public—an approach that it publicly stated could revolutionize the financing and production of entertainment content,” the SEC order said.
The settlement agreement and SEC fine for Stoner Cats came with a cease-and-desist order on unregistered sales of securities.
Within 14 days of the order, the Stoner Cats fine needed to pay the $1 million SEC fine over the Stoner Cats NFTs.
Stoner Cats NFT purchasers were told it was an investment to gain access to web series and online community, SEC order said
The Stoner Cats fine came after the company promised Stoner Cats NFT investors that they would get exclusive access to the new web series and also would be part of an online community that would have access to unspecified future entertainment content.
The company told investors that the NFTs were similar to a ticket to Stoner Cats content and, if they did not want it anymore, they could sell it to someone who did. Stoner Cats used their social media to promote not only the initial sale of the Stone Cats NFTs but also future sales on the secondary market, the SEC order said.
DraftKings is facing a class action lawsuit claiming it is operating an unregistered securities exchange by selling non-fungible tokens (NFTs) on its DraftKings Marketplace.
Have you ever watched the Stoner Cats web series? Let us know in the comments.
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This news is republished from another source.
