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The SEC has fined "Stoner Cats" $1 million.
The US Securities and Exchange Commission (SEC) has fined the NFT-based web series "Stoner Cats", owned by Hollywood couple Mila Kunis and Ashton Kutcher, for selling the unregistered securities as NFTs. By buying one of the 10,000 NFTs, fans could gain exclusive access to the six-episode animated series. Every time one of these NFTs was resold, the original owner would earn a 2.5% royalty, and the SEC said that social media was used to promote the resale of the NFTs, which suggested a return on investment, making the product potentially unregistered securities. The SEC has fined "Stoner Cats" $1 million. The money will be returned to people who were financially harmed by purchasing NFTs. The company must also destroy all NFTs in its possession.
Last year, Kim Kardashian was fined £1.26 million by the SEC for failing to properly disclose that she was being paid to promote a crypto asset security sold by EthereumMax. According to Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, "regardless of whether your offering involves beavers, chinchillas, or animal-based NFTs, under the federal securities laws, it’s the economic reality of the offering—not the labels you put on it or the underlying objects—that guides the determination of what’s an investment contract and therefore a security".