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Mila Kunis' 'Stoner Cats' NFT Company Charged by SEC

11 points by RadixDLT 3y ago

Melting_Harps 3y ago
So, like with most things crypto related there are a lot of things to discuss, chief among them that I think that while NFTs are mainly a scam (they were the pump and dump schemes of the latest bubble, the same way ICOs were before that) their was a limited use-case for them: crowd-sourcing. The SEC pretty much sided with a penalty that lets users know that while there is a cost of doing business, it only equated to an 1/8th (12.5%) of the total NFT sell: > SC2 agreed to a cease-and-desist order, but did not dispute the SEC's investigation. The company will pay a civil penalty of $1 million, which will be used to set up a "Fair Fund" to reimburse investors injured by the sale. The company must also destroy all Stoner Cats NFTs in its possession as part of the settlement. This means they paid an effective 12.5% tax on the crowd sourcing effort, which is not unlike the take that and misc taxes from using traditional crowdsourcing platforms. What this means is that if this were to take place again, and it could, the best thing to do is just do it outside the US jurisdiction where you aren't subject to such penalties. Do it in El Salvador and you can do it entirely tax free if you cash out with Bitcoin and decide to sell some into USD. If we learned anything from the Canadian Trucker's protest is that while these financial tools/instruments may seem stupid to the unsuspecting eye, what they are doing is slowly eroding at the monopoly Governments have had on money; they can go after individual users, or in the case of Canada exchanges, but once on-board you can conduct as you please. People always ask where are there examples of the Free-Market, and if you have been paying attention this space long enough you will see this messy experiment is playing out. Ironically the US government, as well as other nation-states, are some of the largest holders of Bitcoin. I'm not shocked they used their celebrity status to cash in on this, so many others pumped S**coins all day and got hit with small fines relative to their gains, what does surprise me is that they said they would need to destroy all of the NFTs in their possession, which just effectively gave them more scarcity and in these shallow, and manipulated markets probably saw a huge spike in price as well as interest as Kushner/Kunis have been in the media as of late. It's total caveat emptor, and if those that purchased it got a series out of it I cannot see what the problem is here, and my negative biases of ETH aside, it seems like the SEC are clearly over-stepping their bounds here.
add-sub-mul-div 3y ago
It didn't hit me until just now. The reason NFT projects are so cringe is akin to why so much spam email is intentionally full of typos. They're targeting who they think is most likely to fall for it.
- ClassyJacket 3y ago
  My god you're right. Or, that, but accidentally - it's survivorship bias as the only ones that do succeed are the cringe ones.

11 points by RadixDLT 3y ago

So, like with most things crypto related there are a lot of things to discuss, chief among them that I think that while NFTs are mainly a scam (they were the pump and dump schemes of the latest bubble, the same way ICOs were before that) their was a limited use-case for them: crowd-sourcing. The SEC pretty much sided with a penalty that lets users know that while there is a cost of doing business, it only equated to an 1/8th (12.5%) of the total NFT sell: > SC2 agreed to a cease-and-desist order, but did not dispute the SEC's investigation. The company will pay a civil penalty of $1 million, which will be used to set up a "Fair Fund" to reimburse investors injured by the sale. The company must also destroy all Stoner Cats NFTs in its possession as part of the settlement. This means they paid an effective 12.5% tax on the crowd sourcing effort, which is not unlike the take that and misc taxes from using traditional crowdsourcing platforms. What this means is that if this were to take place again, and it could, the best thing to do is just do it outside the US jurisdiction where you aren't subject to such penalties. Do it in El Salvador and you can do it entirely tax free if you cash out with Bitcoin and decide to sell some into USD. If we learned anything from the Canadian Trucker's protest is that while these financial tools/instruments may seem stupid to the unsuspecting eye, what they are doing is slowly eroding at the monopoly Governments have had on money; they can go after individual users, or in the case of Canada exchanges, but once on-board you can conduct as you please. People always ask where are there examples of the Free-Market, and if you have been paying attention this space long enough you will see this messy experiment is playing out. Ironically the US government, as well as other nation-states, are some of the largest holders of Bitcoin. I'm not shocked they used their celebrity status to cash in on this, so many others pumped S**coins all day and got hit with small fines relative to their gains, what does surprise me is that they said they would need to destroy all of the NFTs in their possession, which just effectively gave them more scarcity and in these shallow, and manipulated markets probably saw a huge spike in price as well as interest as Kushner/Kunis have been in the media as of late. It's total caveat emptor, and if those that purchased it got a series out of it I cannot see what the problem is here, and my negative biases of ETH aside, it seems like the SEC are clearly over-stepping their bounds here.

add-sub-mul-div 3y ago

It didn't hit me until just now. The reason NFT projects are so cringe is akin to why so much spam email is intentionally full of typos. They're targeting who they think is most likely to fall for it.

ClassyJacket 3y ago
My god you're right. Or, that, but accidentally - it's survivorship bias as the only ones that do succeed are the cringe ones.