Stoner Cats Creator Agrees to Pay IDR 15.3 Billion Fine to SEC Regarding Illegal NFT Sales

NFT Stoner Catas. (photo: display/ary/voi)

JAKARTA - The creator of the popular animated web series Stoner Cats will pay a civil fine of 1 million US dollars (IDR 15.3 billion) to settle charges filed by the U.S. Securities and Exchange Commission (SEC) that they conducted an unregistered offering of crypto asset securities by selling non-fungible tokens (NFTs), the regulator announced on Wednesday, September 13.

Stoner Cats 2 LLC neither admitted nor denied any legal violations when settling allegations that they illegally raised  8.2 million US dollars (IDR 126 billion) in July 2021 by selling 10,320 NFTs for approximately  800 US dollars (IDR 12.2 million) each, which sold out within 35 minutes.

They also agreed to destroy all NFTs in their possession. NFT refers to a token that represents an asset such as a work of digital art. Lawyers for the Stoner Cats did not immediately respond to a request for comment.

The settlement on Wednesday is the SEC's second in its efforts to address the NFT issue, following a settlement with Impact Theory LLC last month.

The SEC targeted companies involved in the production or trading of digital assets, saying such assets are comparable to securities such as stocks or bonds that need to be supervised by the SEC.

Stoner Cats is an adult animated series about house cats who become sober after being exposed to their owner's medical marijuana, which is used to relieve the early symptoms of Alzheimer's.

Six episodes were released from July 2021 to December 2022, and the cast includes several famous actors such as Jane Fonda, Mila Kunis, Ashton Kutcher, Seth MacFarlane, and Chris Rock.

The NFT gives its holder exclusive access to watch “Stoner Cats” online. Investors are told that the NFTs are like tickets, and that “the more successful the event, the more successful your NFT will be.”

"Stoner Cats wanted all the benefits of offering and selling securities to the public but ignored the legal responsibilities that came with doing so," SEC official Carolyn Welshans said in a statement, quoted by Reuters.

Two of the five SEC commissioners, both Republicans, opposed the measure, saying in a joint statement that the regulator should instead outline “clear guidance for artists and other creators who want to experiment with NFTs.