A popular power couple in Hollywood, Mila Kunis and Ashton Kutcher, are in serious trouble because the U.S. Securities and Exchange Commission (SEC) is charging their NFT-based web series, “Stoner Cats,” with selling unregistered securities.

The concept of the adult animated television series “Stoner Cats” is novel: house cats that are exposed to their owner’s medical marijuana eventually develop awareness. Fans had to buy one of 10,000 NFTs, which are worth around $800, to get access to this fascinating six-episode series that stars A-list celebs like Jane Fonda, Chris Rock, Seth MacFarlane, and even Ethereum co-founder Vitalik Buterin.

The offer of exclusive access to the show and a 2.5% royalty for the original NFT owners each time one of these digital assets was resold was what made “Stoner Cats” stand out. “Stoner Cats” made the crucial marketing decision to highlight the direct correlation between the success of the NFTs and the performance of the show, implying that “the more successful the show, the more successful your NFT will be.”

“Stoner Cats” were under investigation by the SEC for using social media to promote the resale of these NFTs, particularly because these recommendations appeared to allude to possible investment returns. The SEC concluded that “Stoner Cats” NFTs ought to be categorized as unregistered securities as a result.

The @StonerCatsTV account tweeted on September 7, 2021, a comical suggestion that the best course of action in the event of a cryptocurrency market decline would be to “Buy more ETH & sweep the Stoner Cats floor.” This tweet was included in an excerpt from the SEC’s formal statement.

“Stoner Cats” has consented to settle the SEC’s claims by paying a $1 million fine and creating a Fair Fund to compensate people who lost money on their NFT purchases. Furthermore, the business will have to destroy every NFT that it owns.

The growing SEC crackdown on cryptocurrency initiatives backed by celebrities is reflected in this case. Parallel to this, Kim Kardashian and the SEC settled last year for $1.26 million over claims that she had concealed the payment she received for endorsing a cryptocurrency asset security connected to EthereumMax.

The SEC’s Division of Enforcement Director, Gurbir S. Grewal, stressed that under federal securities laws, an offering’s economic reality—not its labels or underlying objects—determines whether it qualifies as an investment contract and, consequently, a security, regardless of whether it involves beavers, chinchillas, or animal-based NFTs.