The United States Securities and Exchange Commission (SEC) has accused Stoner Cats 2 LLC (SC2), the company behind the NFT series called Stoner Cats, of raising $8 million through NFTs. Additionally, SC2 has been charged with conducting an unregistered securities offering, resulting in various sanctions imposed by the SEC.
Details of the Allegations
According to the SEC, SC2 conducted over 10,000 NFT sales starting at approximately $800 each in 2021. The proceeds from these sales were intended to finance the Stoner Cats animated series.
The SEC alleges that SC2 marketed the NFTs with the potential for secondary sales, suggesting to NFT holders that they could sell these digital assets at higher prices in the future.
As a result of the SEC’s investigation, it was determined that at least 10,000 secondary sales with a total value exceeding $20 million took place.
In response to the allegations, SC2 entered into a series of sanctions agreements with the SEC. These sanctions include:
Cease and Desist Order: SC2 has agreed to a cease and desist order imposed by the SEC, which requires SC2 to cease its unregistered securities offerings and refrain from engaging in similar activities in the future.
Monetary Penalty: SC2 will pay a $1 million monetary penalty to the SEC.
Fair Fund for Damages: A fair fund will be established by SC2 to compensate “injured investors” who suffered losses due to SC2’s actions.