An NFT-backed animated series production featuring the voices of Ashton Kutcher, Mila Kunis, Chris Rock, Dax Shepard, Jane Fonda and Seth MacFarlane has been fined $1 million for misleading investors.
Stoner Cats, which was funded through the sale of $8 million in non-fungible tokens [NFTs] to investors in 2021, was part of a scheme to misappropriate those funds, according to charges brought by the Securities and Exchange Commission. The SEC said it charged production entity Stoner Cats 2 LLC with conducting an unregistered offering of crypto asset securities.
Kunis is listed on the production’s website as a member of the “production team” and “blockchain team.” She and Kutcher have had a difficult week, having faced intense criticism for offering legal statements supporting former That ’70s Show castmate Danny Masterson despite his sentencing to three decades in prison on felony rape conviction. They later apologized.
Without admitting or denying the SEC’s findings, the LLC agreed to a cease-and-desist order and to pay a civil penalty of $1 million, the commission said. The action also establishes a fund to return money to investors affected by the situation, and all NFTs related to the series will be destroyed by the production, which must also post a public notice about the SEC’s order.
NFTs and cryptocurrency swept through Hollywood and greater society at the start of this decade, reaching a peak with Super Bowl commercials featuring the likes of Larry David and Matt Damon. More recently, though, purveyors of the new tech-backed equities have experienced a backlash, with stars facing investor lawsuits over their endorsements.
An SEC order says in July 2021 the LLC offered more than $10,000 NFTs for $800 each, selling out of them in 35 minutes. After the sale, the production’s marketing highlighted “specific benefits of owning them,” the SEC says, including the option of reselling the NFTs on the secondary market.
“The SC2 team emphasized its expertise as Hollywood producers, its knowledge of crypto projects, and the well-known actors involved in the web series, leading investors to expect profits” due to the resale value, the SEC said in a press release, calling it a violation of the Securities Act of 1933.