Title: SEC Charges Mila Kunis and Ashton Kutcher’s NFT-Based Web Series “Stoner Cats” for Unregistered Securities Offering
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In a recent development, Mila Kunis and Ashton Kutcher’s NFT-based web series, “Stoner Cats,” has come under scrutiny from the U.S. Securities and Exchange Commission (SEC) for offering unregistered securities. The animated series, which boasted the participation of A-list celebrities like Jane Fonda, Chris Rock, and Seth MacFarlane, featured 10,000 non-fungible tokens (NFTs) that were sold for approximately $800 each, providing fans with exclusive access to the show.
Furthermore, “Stoner Cats” also involved Ethereum co-founder Vitalik Buterin, adding credibility to the project. The NFT owners were promised a 2.5% royalty each time their NFT was resold, with the anticipation that the success of the show would positively impact the value of the NFTs.
However, the SEC determined that the promotion of the NFTs suggested a potential return on investment, leading to the classification of the NFTs as unregistered securities. This move is part of the SEC’s ongoing crackdown on celebrity-endorsed crypto projects, following last year’s settlement with Kim Kardashian for failing to disclose her paid promotion of a crypto asset security.
As a result of the SEC’s charges, “Stoner Cats” has reached a settlement, which includes a payment of a $1 million fine and the establishment of a Fair Fund to reimburse individuals who suffered financial harm from purchasing the NFTs. The resolution highlights the SEC’s commitment to protecting investors and enforcing regulations within the cryptocurrency space.
Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, stressed that the determination of whether an offering constitutes a security depends on the economic reality of the investment, rather than the labels or underlying objects involved. This further emphasizes the need for careful evaluation and compliance within the evolving landscape of cryptocurrencies and NFTs.
With the increasing popularity of NFTs and the potential financial risks associated with them, investors and consumers must be vigilant and informed. The SEC’s actions serve as a reminder that the crypto space is subject to regulatory scrutiny, and individuals should exercise caution when participating in these types of investments.
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