NFT Marketplaces Delist Stoner Cats Collection After SEC Charges
Stoner Cats NFTs removed from major marketplaces following SEC charges. Co-created by Mila Kunis, the project sold over $8 million in primary sales.
The biggest NFT marketplaces have removed the collection following charges by the United States Securities and Exchange Commission (SEC).
Stoner Cats was co-created by Hollywood actress Mila Kunis and her Orchard Farm Productions studio. The project, which sold Ethereum NFTs, was tied to a celebrity-packed animated series. Notable voices included Mila Kunis, Jane Fonda, Chris Rock, and even Ethereum founder Vitalik Buterin. The series revolved around cartoon cats indulging in recreational activities. In July 2021, the project witnessed a roaring success, selling 10,420 NFT passes and netting over $8 million from the primary sale. This success was further amplified with over $20 million worth of secondary market sales.
The SEC charged the developers, Stoner Cats 2 LLC (SC2), for conducting an unregistered offering of crypto asset securities. The regulatory body claimed that SC2 failed to register the NFTs as investment contracts, which is a violation of securities regulations. The SEC's stance was clear: SC2 sought the benefits of a public offering but avoided the associated responsibilities.
Following the charges, SC2 agreed to a cease-and-desist order, paying a penalty of $1 million. They also committed to destroying any remaining NFTs in their possession. Despite these actions, the average price for a Stoner Cat NFT surged over 300%.
Prominent marketplaces like OpenSea, Blur, and Rarible removed the Stoner Cats NFTs from their platforms. While OpenSea and Rarible confirmed the delisting, Blur has yet to provide an official statement. However, it's worth noting that while trading was disabled on these platforms, the NFTs remained on the blockchain and in the wallets of their holders.
Despite the delisting from major platforms, some marketplaces, such as LooksRare and X2Y2, continue to list the Stoner Cats NFTs, allowing for continued trading.
SEC Commissioners Hester Pierce and Mark Uyeda issued a joint statement challenging the actions against the NFT project. They argued that the Stoner Cats NFT sale could be seen as a form of "fan crowdfunding," a common practice in the creative industry. They also stated that:
“Were we to apply the securities laws to physical collectibles in the same way we apply them to NFTs, artists’ creativity would wither in the shadow of legal ambiguity.”
After the SEC announcement regarding Stoner Cats NFTs, there was a notable surge in their sales last week. The lowest listed NFT, known as the floor price, escalated from 0.019 ETH ($30) on Wednesday to 0.082 ETH ($131) by early Thursday, according to figures from NFT Price Floor. Up until last week, these NFTs were actively traded on platforms like OpenSea and Blur. However, the value has since experienced a significant decline, with these NFTs vanishing from leading marketplaces. The present floor price is approximately 0.037 ETH, equivalent to around $61.
