SEC Announces Establishment of Fair Fund for Stoner Cats NFT Investors to Claim Relief

SEC Establishes Stoner Cats Fair Fund

The U.S. Securities and Exchange Commission (SEC) has taken significant steps to provide financial relief to investors affected by the Stoner Cats NFT offering. On September 13, 2023, the SEC concluded administrative proceedings against Stoner Cats 2, LLC, detailing the ramifications of their unregistered securities offering.

In July 2021, the company sold 10,320 non-fungible tokens (NFTs) branded as Stoner Cats, each priced at 0.35 ETH, translating to roughly $800 at the time. This high-demand offering sold out within an astonishing 35 minutes, accumulating approximately $8.2 million. However, the SEC found that Stoner Cats 2 failed to register these securities, violating Sections 5(a) and 5(c) of the Securities Act of 1933.

Purpose of the Fair Fund

In response to these violations, the SEC has set up a Fair Fund to ensure that the monetary penalty imposed on Stoner Cats 2 is distributed to harmed investors. With a civil monetary penalty of $1,000,000 paid fully by the company, these funds have been deposited into a designated account, and additionally accrued interest will supplement the total available for distribution.

Claiming Eligible Losses

Eligible individuals and entities who purchased Stoner Cats NFTs during the initial offering are invited to submit a Claim Form by May 23, 2026. To qualify, claimants must have purchased the NFTs directly from Stoner Cats 2, and the recognized loss must meet a threshold of $20. The detailed eligibility requirements, including exclusions for certain parties, can be reviewed in the Plan of Distribution available on the Fair Fund website.

Claim Forms will be sent to known Preliminary Claimants, as identified by Epiq Class Action Claims Solutions, Inc., the appointed Fund Administrator.

Important Dates and Submissions

To participate, affected individuals must act swiftly: Claim Forms can be submitted either electronically on the Stoner Cats Fair Fund website or via mail. All submission methods have the same deadline, and failure to submit by the Claims Bar Date may result in forfeiting eligibility for any potential distribution payments. Careful completion and documentation are required for each transaction listed on the Claim Form.

Next Steps for Claimants

Preliminary Claimants should expect to receive a Claim Status Notice within 120 days following the Claims Bar Date. This document will outline the acceptance or denial of their claim. If any claim is denied, the Claim Administrator will provide reasons and allow for a chance to remedy the situation.

As the landscape of NFT policies continues to evolve, the SEC's actions in establishing the Stoner Cats Fair Fund serve as a crucial reminder of regulatory compliance within the digital asset sector. Investors are encouraged to visit StonerCatsFairFund.com for more information and to ensure they adhere to the submission requirements.