Star-powered Stoner Cats web series settles with SEC
The SEC has settled with makers of an animated web series, Stoner Cats, financed by the sale of 10,320 NFTs, produced by Mila Kunis's Orchard Farm Productions.
Why it matters: While the company behind the show, Stoner Cats 2, LLC, did not admit wrongdoing, it's a notable loss for the notion of so-called utility NFTs, tokens that provide access to some content or service.
How it works: The 10,420 NFTs in the Stoner Cats series represented different cats on the web TV show of the same name.
- There were six episodes of the show. They could only be viewed by holders of a Stoner Cat NFT.
- At launch, each NFT cost 0.35 ethers (about $800, according to the SEC). The initial sale sold out, but it was a bit of a mess.
- Further, the team planned to create a decentralized autonomous organization, or DAO, and generate more content for Stoner Cats holders, in an arrangement not unlike others we have seen.
Like many NFT projects, the creators received a royalty when it was traded on markets that honor royalty payments. In this case, it was 2.5% of each sale.
Context: Some crypto projects have had the idea that if the tradable asset it sells has some non-financial purpose (such as accessing media content), then that will protect it from the notion that it's a speculative asset.
- The Stoner Cats team opted not to fight that fight in court, however.
- The company has agreed to a $1 million fine, destruction of all the NFTs it holds and a notice of the violation across all its web channels.
The intrigue: The show had real star power, featuring the talents of Kunis, Ashton Kutcher, Jane Fonda and even Ethereum creator Vitalik Buterin.
- While early on the promoters made much of these associations, there's no mention of any of the celebrities involved in the settlement, unlike some similar announcements from the SEC.
By the numbers: One NFT sold for 931 ETH, according to OpenSea.
- That said, the price of the most common cats never rose above the initial offering price, according to NFT Price Floor.
Quick take: DVDs used to cost something like $20 for Hollywood scale films, but now a person can stream hundreds of movies and high quality shows for less than that each month.
- Stoner Cats offered six short, cheap cartoons, that were only viewable on the web, for $800.
Editor's note: This article was corrected to reflect the accurate number of NFTs sold and the total number in the series.