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The Future. Stoner Cats, the starry six-episode animated Web3 series, was made an example of by the Securities and Exchange Commission under the agency’s new mandate to treat every crypto but Bitcoin as an unregistered security. While the fate of crypto assets will ultimately still need to be determined by the courts, the ruling may end Hollywood’s willingness to experiment with the technology and cancel promising in-the-works indie projects like Runner and The Fringe.
Sobering sanctions
The SEC just snuffed out Stoner Cats, the animated series created by Ash Brannon, Chris Cartagena, and Sarah Cole.
- The agency charged the production company, Stoner Cats 2 LLC, with “conducting an unregistered offering of crypto asset securities.”
- That’s because not only did actors Ashton Kutcher and Mila Kunis star in and promote the series that required an NFT to watch, but they also touted the future profit potential of the NFT.
Why does that matter? The cast and crew were paid with the token proceeds and royalties from secondary market sales, so promoting the NFT’s future value allegedly drove sales and inflated the price — the project sold out of 10,000 NFTs in 35 minutes, raising $8 million back in 2021. The SEC alludes that if the tokens were just marketed as “collectibles,” then maybe they wouldn’t have been targeted. (But, let’s be real, NFTs have never been just collectibles).
Although Stoner Cats didn’t admit to any wrongdoing (because the rules that now govern NFTs are very different than a couple of years ago), the producers agreed to pay a $1 million civil penalty, establish a fund to pay back the affected investors, and destroy all Stoner Cat NFTs.
The blockchain is definitely not forever.
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