The American Securities and Exchange Commission (SEC) announced this today “Stoner Cats,” the animated, NFT-powered web series created by Mila Kunis’ production studio, violated federal securities laws when it sold NFT passes to watch the video content. But what happens now?
The company behind the show, which used the voice talents of numerous A-stars including Kunis, Ashton Kutcher, Chris Rock and Jane Fonda, has agreed to pay a $1 million fine without admitting the SEC’s findings or deny it, the agency said.
The SEC’s order means that after today’s action, Stoner Cats will no longer functionally exist as an NFT community. But fate will befall the Stoner Cat NFTs currently in circulation, and the six-episode series they are designed to unlock?
Mila Kunis’ Stoner Cats NFT Project Sued by SEC, Settles for $1 Million
Will the NFTs be destroyed?
According to the SEC, as a condition of today’s settlement, Stoner Cats has agreed to destroy all NFTs in its possession. This can be achieved through the process of “burning,” in which NFTs are sent to a digital wallet without a private key, locking them for eternity.
However, the producers and executives behind Stoner Cats can only burn NFTs they own; on-chain tokens can only be burned by their respective holders. In other words, the more than 5,000 unique wallet holders who own Stoner Cats NFTs on Ethereum need not fear for the security of their tokens.
Will NFT holders lose their benefits?
Technically, there is no way to destroy these NFTs without the consent of the holders. However, they can be effectively rendered worthless if their usefulness (including granting access to the “Stoner Cats” web series, behind-the-scenes bonus material, and the Stoner Cat community) is neutralized by the creators.
The web video series “Stoner Cat” is currently hosted on Arweave, a decentralized blockchain protocol. A statement about the Stoner Cats website reads that the show’s creators have no control over that content, and now that it’s on Arweave, it can never be removed.
Declutter reached out to the Stoner Cats Project and Kunis’ production partners to ask how they plan to adjust access to the web series, if at all, but did not immediately receive a response. The producers also did not immediately respond to questions about how they plan to handle or destroy the remaining Stoner Cat NFTs still under their control.
How will Stoner Cats compensate NFT buyers?
According to the SEC, the $1 million fine paid by Stoner Cats will be used to establish a “Fair Fund” to compensate “injured investors” who purchased Stoner Cats NFTs. Neither the SEC nor the show’s creators immediately responded to questions from Declutter about how that money will be distributed, or who will be eligible for a payment.
Stoner Cats NFT Sales Surge After SEC Reveals Charges
Perhaps in the hope that current holders will be eligible for compensation, Stoner Cats NFTs have become fast as of this morning more desirable, no less: the bottom price of the collection has skyrocketed 163% in the last three hours alone, up to around $79 worth of Ethereum at the time of writing.