SEC charges against “Stoner Cats” NFT series lead to a surge in sales and prices on secondary markets.
The U.S. Securities and Exchange Commission (SEC) recently took enforcement action against the NFT-driven cartoon series Stoner Cats. In a surprising twist, this has caused a spike in NFT sales and prices on secondary markets, with buyers rushing to invest.
Background and Recent Events
In 2021, actress Mila Kunis launched the NFT-based project “Stoner Cats.” This cartoon series quickly gained traction and popularity among NFT collectors. However, recent developments have seen the project facing charges by the SEC. The regulatory authority claims that Stoner Cats engaged in the sale of unregistered securities. Despite these legal challenges, it seems that the project’s NFTs are now hotter than ever.
On the Ethereum blockchain, Stoner Cats NFTs sales skyrocketed after the SEC’s announcement. Data from the OpenSea marketplace highlights this sudden surge. On the day before the SEC announcement, only a single Stoner Cat NFT was sold. Post-announcement, dozens changed hands in quick succession.
Price Evolution and Collector Behavior
Prices have responded in kind. Prior to the enforcement news, the lowest NFT listing from the project stood at 0.019 ETH, approximately $30. Fast forward a few hours, and the value leaped to 0.049 ETH, around $79.
Several factors might explain this buying frenzy. Some collectors may view the NFTs as cultural artifacts, representing a renowned NFT project under regulatory scrutiny. For others, it’s an opportunity to own a piece of digital art associated with celebrities like Mila Kunis. The possibility of a future refund, due to an SEC-enforced “Fair Fund”, might also be luring some investors.
Originally, these NFTs were launched at 0.35 ETH each, which was roughly $800 in July 2021. Through the initial sale, the project amassed an impressive $8 million in just 35 minutes, selling 10,420 tokens. Secondary sales then amplified this figure, reaching upwards of $20 million, as reported by the SEC.
Penalties and Celebrity Involvement
Addressing the legal side, Stoner Cats 2 LLC, responsible for the show’s production, has consented to a $1 million civil penalty. Moreover, they’ve committed to destroy any remaining NFTs in their possession.
One of the draws of the Stoner Cats project was undoubtedly its celebrity appeal. Mila Kunis’ Orchard Farm Productions produced the show. Not only did Kunis lend her voice, but other well-known figures did too, such as her spouse Ashton Kutcher, comedian Chris Rock, “Family Guy” brainchild Seth McFarlane, legendary actress Jane Fonda, and even Ethereum’s pioneer, Vitalik Buterin.