The U.S. Securities and Exchange Commission (SEC) has announced it charged Stoner Cats 2 for allegedly conducting an unregistered offering of crypto asset securities in the form of non-fungible tokens (NFTs).
According to the SEC, the NFTs were offered to raise funds for an online animated series titled "Stoner Cats." The regulator has pointed to a specific event on July 27, 2021, when SC2 made available over 10,000 NFTs for purchase, each priced around $800. Within a mere 35 minutes, the company successfully sold out its offerings, amassing approximately $8 million.
The lightning-fast sell-out signaled significant investor interest, according to the SEC, which was likely fueled by SC2’s marketing strategies. Per the SEC’s press release, SC2's promotional strategies for the Stoner Cats NFTs leaned heavily on the potential benefits of ownership, including the ability to resell on secondary markets.
The regulator added that SC2 highlighting its team’s expertise in Hollywood production and crypto projects, as well as the involvement of well-known actors in the web series, led investors to anticipate profits.
The SEC also pointed to a 2.5% royalty that SC2 had embedded into every Stoner Cats NFT's architecture. Its investigation concluded that SC2 had violated the Securities Act of 1933 by offering and selling these crypto asset securities without registering them or qualifying for an exemption.
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- Source: https://www.cryptocompare.com/email-updates/daily/2023/sep/14/
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