SEC commissioners disagree with Stoner Cats charges; Compare NFTs to 1970s Star Wars merchandise
Recently, two commissioners of the U.S. Securities and Exchange Commission (SEC), Mark T. Uyeda and Hester M. Peirce, have aired their disagreements. Yesterday, they issued a public dissent against the SEC’s classification of the Stoner Cats non-fungible token (NFT) series as a securities sale. Drawing a parallel, they likened the NFTs to the “Star Wars collectibles sold in the 1970s.”
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SEC drops the hammer on Stoner Cats
Yesteray, the SEC prosecuted the creators of the Stoner Cats project with selling unregistered securities during the NFT launch in 2021. The decision was based on the project highlighting specific advantages of owning these NFTs, notably the potential to resell them on secondary markets and earn royalties.
However, the Republican commissioners contested the regulator’s verdict in a letter of dissent. They see the Stoner Cats sale as “fan crowdfunding,” a trend familiar in the realms of artistry and entertainment. To them, it more closely mirrors the sale of Star Wars merchandise in the previous century than a securities sale.
Drawing parallels with Star Wars redeemable action figures
Interestingly, Uyeda and Peirce drew attention to the 1977 “Early Bird Certificate Packages.” These packages, redeemable for Star Wars action figures and fan club membership, were, in their view, comparable to the Stoner Cats NFTs.
Both Uyeda and Perice believe that if the SEC’s stance on the NFTs were to be consistent, it should have also applied to the Star Wars IOU certificates since they also had resale potential. They satirically pointed out:
“Using the analysis of today’s enforcement action, the SEC should have parachuted in to save those kids from Star Wars mania,”
Stoner Cats collection pumps after charges
But what exactly are the Stoner Cats NFTs? Owners of these tokens gain exclusive access to a six-episode animated series titled “Stoner Cats.” With a star-studded cast, including Ashton Kutcher, Mila Kunis, Seth MacFarlane of “Family Guy,” and comedian Chris Rock, the NFTs were a means for fans to “engage directly with the content they want to watch and be a part of the content creation process.”
According to the official website, the upcoming show is “a story of a woman who uses medical marijuana to alleviate her early Alzheimer’s symptoms and her beautiful family of cats who will do literally anything to save her.”
As a result of the charges, the collection registered a significant pump of roughly 400% in its floor price.
Urging SEC to issue clearer legislation
Financially, proceeds from the NFT sales went straight to those involved in the show’s creation. An important distinction Peirce and Uyeda stress in their letter is that “the fact that money is involved does not transform NFTs into securities.”
Amidst this controversy, the dissenting commissioners have voiced a call to action: they urge the SEC to lay down “clear guidelines” for artists and creators. In this way, creative minds can have the freedom to “experiment with NFTs” without undue regulatory fears.
