The SEC's 'Stoner Cat' Case: A closer look

The U.S. Securities and Exchange Commission (SEC) informed the makers of the NFT-based animated web series "Stoner Cats" on Wednesday that they must pay a $1 million fine and also remove any remaining cartoon cat NFTs from their possession.

Today, Stoner Cat NFTs have seen their value increase by 250% compared to yesterday, and trading volume has surged by a staggering 7,256%.

The U.S. Securities and Exchange Commission (SEC) has filed charges against Stoner Cats, an NFT-based cartoon series project initiated in 2021, alleging the sale of unregistered securities.

However, despite the regulatory challenges revealed on Wednesday, NFT collectors are actively purchasing these tokens on secondary markets, causing their prices to more than double.

Stoner Cats NFTs Gain Momentum Following SEC Charges Disclosure

Since the SEC's enforcement action was made public on Wednesday morning, numerous Stoner Cats NFTs on the Ethereum blockchain have been sold, as reported by OpenSea marketplace data.

To provide context, only one NFT from the project was sold on Tuesday. Consequently, the minimum listed price for these NFTs in the project surged from 0.019 ETH (approximately $30) earlier today to its current rate of 0.049 ETH (approximately $79) at the time of this writing.

In July 2021, the NFTs were initially sold for 0.35 ETH, equivalent to approximately $800 each at that time. During the token sale, the project managed to raise over $8 million within just 35 minutes by selling 10,420 tokens, and secondary market transactions subsequently exceeded $20 million, as reported by the SEC.

Stoner Cats 2 LLC, the company established for the production of the show, has agreed to pay a $1 million civil penalty and will also dispose of any remaining NFTs held by the company.

The series was produced by Mila Kunis' Orchard Farm Productions, and notable figures such as her husband Ashton Kutcher, comedian Chris Rock, "Family Guy" creator Seth McFarlane, actress Jane Fonda, and Ethereum creator Vitalik Buterin were among the voice actors involved.

Stoner Cats stood out as one of the rare NFT projects that fulfilled the commitments it made during its token sale, essentially delivering on its concept of utility. It's important to note that while this may not necessarily make the NFTs inherently valuable as collectables, the project's primary objective was to raise funds through crowdfunding to produce a show and provide tokens as souvenirs. The transferability of these NFTs shouldn't necessarily categorize them as investment contracts.

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