The SEC has banned the Stoner Cats NFT project. As a result, top markets such as OpenSea, Blur, and Rarible have all delisted the project.
The project was co-created by Hollywood actress Mila Kunis. However, The SEC has accused its developers of conducting an ‘unregistered offering of crypto asset securities’.
Each NFT was sold by SC2 – the company behind the NFTs – for $800 with 10,000 being sold within 35 minutes netting the company and its investors $8 million in the process.
However, the SEC insists the NFTs were not registered as investment contracts. Despite the violations, markets such as Luxray and X2Y2 still have Stoner Cat NFTs listed.
The SEC claims mandatory registrations were ignored, depriving investors of important project details and disclosures needed to make informed decisions.
SC2 will pay a $1 million fine and has agreed to a cease and desist order in which it will destroy any NFTs it has left. Despite the action, Stoner Cat NFTs have increased over 300% in value.
Just last month The SEC announced its intention to contest a recent court decision regarding the classification of Ripple Labs' XRP token.
In July, US District Judge Analisa Torres ruled that the sale of XRP to retail investors does not qualify as a security.
The SEC recently communicated to Judge Torres its belief that her ruling merits reconsideration by an appellate court.
The SEC also requested a suspension of the case's proceedings during the appeal process, citing the potential impact on other pending court cases involving crypto firms such as Binance and Coinbase, which are also facing allegations of securities violations.