SEC Charges Creator of Stoner Cats Web Series for Unregistered Offering of NFTs

The SEC charged Stoner Cats 2 LLC (SC2) with conducting an unregistered offering of crypto asset securities in the form of NFTs that raised about $8 million to finance the animated web series Stoner Cats. According to the SEC order, SC2 sold more than 10,000 NFTs for about $800 each on July 27, 2021, selling out in 35 minutes, and it configured them to pay SC2 a 2.5 percent royalty on secondary market transactions. SC2 agreed to a cease-and-desist order and a $1 million civil penalty, without admitting or denying the findings. The order also establishes a Fair Fund to return money to injured investors.