JUST IN: The SEC continues its war on NFT projects by going after the Mila Kunis-backed "Stoner Cats," which raised more than $8 million in an NFT drop that sold out in 35 minutes in 2021.
The company behind Stoner Cats agreed to pay a null million civil penalty. The order also established a Fair Fund to return monies that injured investors paid to purchase the NFTs.
“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,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
“Registration of securities, including crypto asset securities, protects investors by providing them with disclosures so they can make informed investing decisions,” said Carolyn Welshhans, Associate Director of the SEC’s Home Office. “Stoner Cats wanted all the benefits of offering and selling a security to the public but ignored the legal responsibilities that come with doing so.”