Mila Kunis-Backed Web Series Faces SEC Enforcement Action for "Unregistered" NFT Offerings

Non-fungible tokens tied to an animated web bid starring Mila Kunis and Ashton Kutcher were illegally offered, according to a Securities and Exchange Commission (SEC) bid connected Wednesday that said the royalty-generating NFTs utilized to concern the bid were unregistered securities.

The bid alleges that Stoner Cats 2 (SC2) reaped astatine slightest $8 cardinal successful income from 100,000 Stoner Cat NFTs representing characters from its eponymous animated web amusement conception successful July 2021. The company's nationalist promotions of the integer creation collectibles earlier and aft the collection's archetypal merchantability "tied the occurrence of the amusement to the worth of the NFTs," fueling investors' expectations to nett disconnected them, the SEC's filing shows.

"SC2 engaged successful an extended media run to beforehand the Stoner Cats NFTs some earlier and aft the offering erstwhile the NFTs traded successful the secondary market, the SEC said successful the order. "[It] engaged successful this behaviour without registering the offering of the Stoner Cats NFTs."

Stoner Cats NFT holders were besides incentivized to commercialized the NFTs, receiving a 2.5% royalty for each secondary-market transaction involving the collectibles, the SEC alleges. That encouraged individuals to bargain and merchantability the NFTs successful astatine slightest 10,000 secondary transactions worthy much than $20 million, according to regulators. In addition, astatine slightest 20% were resold earlier the archetypal occurrence of the Stoner Cats web bid had adjacent aired, the bid shows.

SC2 volition wage a $1 cardinal good and destruct each remaining NFTs successful its possession, according to the order. It has besides agreed to found a money to reimburse individuals who invested successful the tokens.

This isn't the archetypal clip regulators person zeroed successful connected alleged securities offerings from NFT makers. Last month, the SEC brought an enforcement enactment against NFT shaper Impact Theory.