Block Journal
No Result
View All Result
  • Login
en English
nl Nederlandsen Englishfr Françaisde Deutschit Italianopt Portuguêsru Русскийes Españolth ไทยzh-CN 简体中文hi हिन्दीja 日本語
  • Home
  • News
  • Crypto
  • Markets
  • Investing
  • Glossary
  • Videos
  • Charts
    • Crypto
    • Forex
    • Stocks
    • Commodities
  • Magazine
Magazine
Newsletter
  • Trending Now
  • Bitcoin
  • Altcoin
  • Ethereum
  • Analysis
  • Blockchain
  • Metaverse
  • NFT
  • DeFi
  • Web3
  • GameFi
  • ICO
  • Legal
  • Security
Block Journal
  • Home
  • News
  • Crypto
  • Markets
  • Investing
  • Glossary
  • Videos
  • Charts
    • Crypto
    • Forex
    • Stocks
    • Commodities
  • Magazine
en English
nl Nederlandsen Englishfr Françaisde Deutschit Italianopt Portuguêsru Русскийes Españolth ไทยzh-CN 简体中文hi हिन्दीja 日本語
No Result
View All Result
Block Journal
No Result
View All Result
  • News
  • Crypto
  • Markets
  • Investing
  • Videos
  • Charts
Home Crypto NFT

SEC Charges Stoner Cats With Alleged Unregistered $8 Million Securities Sale In NFT Crackdown

News Room by News Room
September 13, 2023
in NFT
Reading Time: 3 mins read
0 0
A A
0

In a recent move that intensifies the Securities and Exchange Commission’s (SEC) crackdown on the Non-Fungible Token (NFT) sector, the SEC has charged Stoner Cats 2 (SC2) with conducting an “unregistered offering of crypto asset securities.”

The charges specifically target Stoner Cats’ sale of non-fungible tokens, which raised approximately $8 million from investors to finance the production of an animated web series.

SEC’s Legal Earthquake Hits NFT Market Once Again

The SEC order reveals that on July 27, 2021, SC2 sold over 10,000 NFTs to investors at approximately $800 each, with the entire supply being sold out within a mere 35 minutes. The SEC alleges that SC2’s marketing campaign highlighted the potential benefits of owning the NFTs, including allowing owners to resell them on the secondary market.

Furthermore, the SEC claims that SC2 emphasized its Hollywood producer expertise, knowledge of crypto projects, and involvement of well-known actors in the web series, which led investors to anticipate profits from the potential rise in resale value.

According to the SEC, SC2 configured the NFTs to provide a 2.5% royalty for each secondary market transaction, incentivizing individuals to buy and sell the NFTs. Subsequently, purchasers allegedly engaged in over 10,000 transactions, amounting to more than $20 million.

The SEC alleges that SC2 violated the Securities Act of 1933 by offering and selling these SEC-denominated “crypto asset securities” to the public without registering the offering or qualifying for an exemption.

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, emphasizes that the determination of whether an investment contract qualifies as security lies in the economic reality of the offering, rather than the labels attached to it. Grewal stated:

Here, the SEC’s order finds that Stoner Cats marketed its knowledge of crypto projects, touted that the price of their NFTs could increase, and took other steps that led investors to believe they would profit from selling the NFTs in the secondary market.

Stoner Cats Settles Charges, Agrees To NFTs Destruction

While the SEC’s actions are intended to “protect investors” by ensuring proper disclosures, some critics argue that the SEC’s language and terminology surrounding the NFT market are biased and lack clarity.

Crypto enthusiast and investor Adam Cochran expressed his concerns, highlighting that there is no such thing as an “unregistered offering of NFTs” since registration requirements typically apply to securities. Cochran believes that the SEC’s communications should accurately reflect the law to avoid a chilling effect through fear-mongering.

In response to the charges, SC2 has agreed to a cease-and-desist order and to pay a civil penalty of $1 million. The order also establishes a Fair Fund to return funds to injured investors who purchased the NFTs.

Additionally, SC2 has committed to destroying all NFTs under its possession or control and publishing notice of the order on its website and social media channels.

The SEC’s lawsuit against Stoner Cats underscores the ongoing regulatory battle surrounding the NFT sector. As the industry evolves, stakeholders are calling for clearer guidelines and unbiased regulatory practices to strike a balance between investor protection and fostering innovation in the digital asset space.

Read the full article here

ShareTweetSharePinShareShareSend

Related News

OpenSea Unveils OpenSea Studio to Help Creators Easily Launch NFT Projects
NFT

OpenSea Unveils OpenSea Studio to Help Creators Easily Launch NFT Projects

October 4, 2023
How the NFT market peaks and bottoms differently from the rest of the industry
NFT

How the NFT market peaks and bottoms differently from the rest of the industry

October 4, 2023
Why X Is the Future of Crypto Growth
NFT

Why X Is the Future of Crypto Growth

October 4, 2023
‘Grand Theft Auto’ dev’s first crypto game sees $5 million in NFT trading
NFT

‘Grand Theft Auto’ dev’s first crypto game sees $5 million in NFT trading

October 3, 2023
Ledger to provide free wallets to Sotheby’s top NFT collectors
NFT

Ledger to provide free wallets to Sotheby’s top NFT collectors

October 3, 2023
Project Lead Shares Why Shiba Inu’s Welly is “Most Valuable”
NFT

Project Lead Shares Why Shiba Inu’s Welly is “Most Valuable”

October 3, 2023
Adidas and Moncler Collab Features AI ‘Adventurers’ and NFTs
NFT

Adidas and Moncler Collab Features AI ‘Adventurers’ and NFTs

October 2, 2023
A Weekend of Art, Inspiration, and Web3 Celebration
NFT

A Weekend of Art, Inspiration, and Web3 Celebration

October 2, 2023
Pudgy Penguins trading volume surges 241% following Walmart deal
NFT

Pudgy Penguins trading volume surges 241% following Walmart deal

October 2, 2023

Discussion about this post

Latest News

SBF arrived 30 minutes late for the first day of the rest of his life

SBF arrived 30 minutes late for the first day of the rest of his life

October 4, 2023
SFC and Hong Kong Police Collaborate

SFC and Hong Kong Police Collaborate

October 4, 2023

Oligarchs are losing out as Putin courts a new class of loyal asset owners

October 4, 2023
Alameda sent $4.1B of FTT tokens to FTX before crash: Nansen report

Alameda sent $4.1B of FTT tokens to FTX before crash: Nansen report

October 4, 2023
Ripple’s Singapore Subsidiary Secures Full Payments License from MAS

Ripple’s Singapore Subsidiary Secures Full Payments License from MAS

October 4, 2023
ADVERTISEMENT

Popular

  • EUR/NOK has still room to fall in the days and weeks to come – Nordea

    EUR/NOK has still room to fall in the days and weeks to come – Nordea

    0 shares
    Share 0 Tweet 0
  • Oil: Upside is limited to $120 in the long run – Nordea

    0 shares
    Share 0 Tweet 0
  • Galaxy Digital Eyes European Expansion With New Regional CEO

    0 shares
    Share 0 Tweet 0
  • US CFTC orders 3 major US banks to pay over $50 million for swap reporting failures

    0 shares
    Share 0 Tweet 0
  • Valkyrie’s Ethereum Futures ETF Approved and Will Start Trading Tomorrow, According to FOX

    0 shares
    Share 0 Tweet 0
Block Journal

Block Journal is the world’s leading source in blockchain news and updates. Follow us to stay up-to-date with all you need to know in web3.

LEARN MORE »

Recent Posts

  • SBF arrived 30 minutes late for the first day of the rest of his life
  • SFC and Hong Kong Police Collaborate
  • Oligarchs are losing out as Putin courts a new class of loyal asset owners

Trending Topics

AI Altcoin Analysis Bitcoin Blockchain Commodities Crypto DeFi Ethereum Forex Futures GameFi ICO Interview Investing Legal Markets Metaverse News NFT Security Stocks Uncategorized Videos Web3

Get Informed

The most important crypto and finance news and events of the day

Be the first to know latest important news & events directly to your inbox.

By signing up, I agree to our TOS and Privacy Policy.

  • About
  • Privacy Policy
  • Terms of use
  • Press Release
  • Advertise
  • Contact

Copyright © 2023 Block Journal - Created by Sawah Solutions.

No Result
View All Result
  • Home
  • News
  • Crypto
  • Markets
  • Investing
  • Glossary
  • Videos
  • Charts
    • Crypto
    • Forex
    • Stocks
    • Commodities
  • Magazine

Copyright © 2023 Block Journal - Created by Sawah Solutions.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.