In a surprising turn of events, the Stoner Cats NFT project, backed by Mila Kunis, experienced a substantial increase in its floor price, soaring by over 250% following an enforcement action by the U.S. Securities and Exchange Commission (SEC). The regulatory body mandated the project to halt operations, pay a $1 million fine, and establish a “fair fund” to facilitate reimbursements for aggrieved parties.
Despite the regulatory crackdown, the NFTs associated with the Stoner Cats project have seen a surge in trading volumes, escalating by a staggering 2,500%. This phenomenon has drawn parallels with the EOS project, which managed to secure substantial profits despite facing a $24 million penalty on a $4 billion fundraising effort.
The Stoner Cats initiative, which successfully raised $8 million initially and garnered an additional $500,000 from royalties, appears to retain a profitable stance. Even with the anticipated returns of numerous NFTs, the project’s financial health seems largely unaffected, with estimations suggesting a net gain of $6.5 million within a few weeks.
The project, renowned for producing seven episodes, each spanning five to seven minutes, ostensibly incurred a production cost of approximately $133,000 per minute of content. The storyline revolves around a woman leveraging medical marijuana to manage early Alzheimer’s symptoms, supported by her devoted family of cats.
The venture boasted a stellar cast, including notable personalities such as Ashton Kutcher, Chris Rock, Dax Shepard, Gary Vaynerchuk, Jane Fonda, Seth McFarlane, and Vitalik Buterin, bringing together a diverse group of talents to narrate the animated series.
As the industry deliberates on the implications of associating royalties with specific NFTs and whether this warrants classification as a security, the Stoner Cats creators — Chris Cartagena, Ash Brannon, and Sarah Cole — have opted not to contest the SEC’s stance.
The regulatory landscape remains somewhat ambiguous, with legal experts highlighting that the SEC’s directive does not explicitly address the matter of the 2.5% royalty on NFTs no longer held by the creators. The overarching mandate against future violations leaves room for interpretation, raising questions about the project’s adherence to the agreement in retaining the proceeds.
While the creators have publicized the SEC’s orders via their Twitter account, there has been no acknowledgment of the regulatory action on the official website as of the latest update.