The US Securities and Exchange Commission (SEC) has issued a Wells notice to CyberKongz, a non-fungible token (NFT) platform.
In an X post on December 16, CyberKongz shared that the SEC questioned the use of an ERC-20 token tied to a blockchain game.
The regulator argued that such tokens must be registered as securities before release. CyberKongz believes this discourse could impact the entire Web3 gaming sector and has promised to oppose it.
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The SEC's focus on CyberKongz seems to center on its 2021 “sale” of Genesis Kongz NFTs. However, CyberKongz clarified that the event was not a primary sale but a contract migration.
CyberKongz emphasized that it has mostly operated without external funding and has relied on limited resources to grow.
Despite the pressure, CyberKongz remains determined. He stated:
We hope that the new administration puts an end to this unjustness on our industry, but until then we will fight for NFT projects on all chains.
The platform received support from Jihoz Zirlin, co-founder of Axie Infinity
It revealed that CyberKongz has been handling SEC inquiries for two years, describing the process as "suffering in silence". The company also criticized the decision, calling it a last-minute effort by the current administration to slow down the NFT industry.
While CyberKongz pushes back against the SEC, other NFT cases have also made headlines. Shaquille O’Neal recently faced a lawsuit over allegations of misleading promotion for the Astrals NFT project. How did he settle the $11M case? Read the full story.
