(Reuters) – The Securities and Exchange Commission (SEC) announced on Wednesday that Stoner Cats, the creator of the popular animated web series, has agreed to pay a civil fine of $1 million to settle charges related to conducting an unregistered offering of crypto asset securities. The company, known as Stoner Cats 2 LLC, allegedly raised over $8 million through the sale of more than 10,000 non-fungible tokens (NFTs), each priced at approximately $800. The NFTs were sold out within just 35 minutes in July 2021. As part of the settlement, Stoner Cats 2 LLC has also agreed to destroy all NFTs in its possession.
The settlement comes as the SEC continues to crack down on unregistered securities offerings in the crypto space. The regulator has been closely monitoring the sale of NFTs, which have surged in popularity in recent years. NFTs are unique digital assets that are bought and sold using blockchain technology. They have gained significant attention as a form of art and collectibles, attracting both individual buyers and investors.
The SEC alleged that Stoner Cats 2 LLC violated securities laws by selling NFTs without registering them as securities or qualifying for any exemptions. The company’s offering was conducted through various online platforms and targeted a wide range of investors. Despite not admitting to any wrongdoing, Stoner Cats 2 LLC has agreed to pay the hefty civil fine and comply with the SEC’s enforcement action.
According to the allegations, Stoner Cats 2 LLC failed to provide investors with the necessary disclosures and information typically required in registered securities offerings. The SEC emphasized the importance of providing investors with accurate and complete information to make informed investment decisions. By settling the charges, Stoner Cats 2 LLC has avoided a more protracted legal battle and potential further penalties.
The settlement serves as a reminder to other companies operating in the NFT space to ensure compliance with securities laws. The SEC’s actions indicate its commitment to protecting investors and maintaining the integrity of the market.
In recent months, the SEC has taken various steps to regulate the crypto industry and address potential risks. The agency has been reviewing and scrutinizing initial coin offerings (ICOs) and other digital asset offerings to ensure compliance with securities laws. The SEC has also been actively investigating fraudulent practices and market manipulation in the crypto market.
This settlement with Stoner Cats 2 LLC marks another significant development in the SEC’s ongoing efforts to establish regulatory clarity in the crypto space. As the popularity of NFTs continues to grow, regulators around the world are increasingly focused on addressing the legal and regulatory implications associated with these digital assets.
With the settlement, Stoner Cats 2 LLC has taken a step towards resolving its legal troubles. However, the outcome of this case is likely to have broader implications for the NFT market and may prompt other companies to reassess their compliance protocols.
(Reporting by Jonathan Stempel in New York)
Credit: The Star : Tech Feed
