It’s been a disastrous week for Mila Kunis and Ashton Kutcher, and it’s only Wednesday. The SEC has sued the Hollywood power couple’s NFT-based web series, “Stoner Cats,” calling the NFTs unregistered securities.
According to the SEC, “Stoner Cats is an animated adult television show about domestic cats who become sentient after being exposed to their owner’s medical marijuana.” animated series featuring celebrities like Jane Fonda, Chris Rock and Seth MacFarlane, and even Ethereum co-founder Vitalik Buterin was on the show.
Every time one of these NFTs was resold, the original owner earned a 2.5% royalty. In marketing the NFTs, Stoner Cats emphasized that “the more successful the show, the more successful your NFT will be.”
The Stoner Cats’ social media accounts continued to promote the resale of these NFTs, and since they strongly suggested a return on investment, the SEC declared the Stoner Cats NFTs to be unregistered securities.
Another great quote from this formal SEC document: “@StonerCatsTV tweeted a meme on September 7, 2021 suggesting that the smartest thing to do during a dip in the crypto markets would be to ‘buy more ETH and floor Stoner Cats to sweep.’”
The order quotes the following meme:
![](https://techcrunch.com/wp-content/uploads/2023/09/Screenshot-2023-09-13-at-3.51.33-PM.png?w=586)
Image credits: Stoner Cats on Twitter
Stoner Cats has reached a settlement with the SEC and must pay a $1 million fine. There will also be a Fair Fund that will give money back to people who have suffered financial loss from purchasing the NFTs. The company must also destroy all NFTs in its possession.
The SEC is cracking down on celebrity-endorsed crypto projects. Last year, Kim Kardashian reached a $1.26 million settlement with the SEC for failing to properly disclose that she was paid to promote a crypto asset sold by EthereumMax.
“Regardless of whether your offering involves beavers, chinchillas, or animal-based NFTs, under federal securities law, it is the economic reality of the offering – not the labels you put on it or the underlying objects – that determines what constitutes an investment is. contract and therefore a security,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement.