Mila Kunis and her NFT project Stoner Cats, which financed an animated television show of the same name, are being investigated by the Securities and Exchange Commission for allegedly misleading investors and offering unregistered securities. The show, created by Kunis’ production company Orchard Farm Productions, revolved around cats that gained sentience when exposed to marijuana smoke.
The SEC’s allegations hinge on the argument that Stoner Cats NFTs were not merely collectibles, as most NFTs purport to be, but were instead sold with the primary intention of turning a profit.
The Stoner Cats show boasted an impressive cast, including Mila Kunis’ husband, Ashton Kutcher, alongside Hollywood heavyweights like Chris Rock, Jane Fonda, Seth MacFarlane, Dax Shepard, and even Ethereum founder Vitalik Buterin, who lent his voice to a character named Lord Catsington. What made the project stand out was its unique funding model, The Byte reports.
Rather than traditional financing methods, Mila Kunis’ project paid its crew and voice actors from the primary sales of the NFTs associated with the show. These NFTs were then encouraged to be resold on secondary markets, with holders promised a 2.5 percent royalty for each subsequent transaction. This resulted in over 10,000 resale transactions, amassing $20 million in cryptocurrency.
The SEC’s allegations hinge on the argument that Stoner Cats NFTs were not merely collectibles, as most NFTs purport to be, but were instead sold with the primary intention of turning a profit. This shift, the SEC contends, classified the NFTs as securities that Mila Kunis should have registered accordingly, similar to stocks and bonds.
This investigation into Stoner Cats is not an isolated incident within the NFT industry.
While this is not the first time such accusations have been made against NFT projects, Stoner Cats gained particular attention due to Mila Kunis and her high-profile associations. Stoner Cats 2 LLC, the company behind the NFTs, did not admit responsibility. But in response to the SEC’s investigation, it agreed to a settlement that included a $1 million fine.
Mila Kunis’ company also committed to destroying all remaining Stoner Cats NFTs in its possession and set up a recovery fund for investors who participated in the project. This level of compensation is notably more extensive than what most NFT projects offer to those affected by their schemes.
This investigation into Stoner Cats is not an isolated incident within the NFT industry. The SEC has recently intensified its focus on alleged securities offerings by NFT makers, exemplified by its enforcement action against NFT maker Impact Theory just last month. As the dust settles on the Mila Kunis scandal, it serves as a reminder that NFTs are not immune to regulatory scrutiny.
Projects that blur the line between collectibles and securities may find themselves facing severe consequences, regardless of their celebrity endorsements or unique concepts. The Mila Kunis Stoner Cats saga underscores the need for transparency, responsibility, and compliance within the NFT space to protect investors and creators.
Mila Kunis Under Fire For Danny Masterson Support
Mila Kunis, who starred in That ’70s Show alongside her husband, Ashton Kutcher, recently came under fire for sending letters of support for their co-star Danny Masterson, who was convicted of rape. The controversy sparked debates about the responsibility of celebrities to use their platform to support victims of sexual assault and the importance of holding abusers accountable. The couple has since apologized for the letters.