SEC Charges Stoner Cats 2 LLC With Unregistered Offering of Crypto Asset Securities
The Securities and Exchange Commission (SEC) has charged Stoner Cats 2 LLC (SC2) with running an unregistered offering of crypto asset securities, raising $8 million in 35 minutes from investors. The SEC’s order finds that the non-fungible tokens (NFTs) were sold to finance a web series and SC2’s marketing campaign led investors to believe that the NFTs could resell for a profit due to the success of the series. SC2 violated the Securities Act of 1933 by not registering the securities or taking advantage of any exemptions. As part of settlement, SC2 must pay a $1 million penalty and destroy all NFTs in its possession or control. They have also agreed to publish notice of the order on their website and social media channels. Injured investors will be able to receive a refund through a Fair Fund established by the order. The illegal activity was further investigated by members of the SEC’s Home Office.