CyberKongz Faces SEC Trouble Over NFTs
Issues Faced by CyberKongz
- CyberKongz has been “suffering in silence for the last two years” after contact from the US SEC
- The SEC has raised concerns about the “sale” of Genesis Kongz NFTs in April 2021, which CyberKongz claims was a contract migration
- CyberKongz accuses the Biden administration of last-minute enforcement actions
CyberKongz, a leading non-fungible token (NFT) platform, recently disclosed that it has received a Wells notice from the US Securities and Exchange Commission (SEC).
In a statement on X, CyberKongz expressed their frustration over the situation, stating that they have faced challenges since their initial contact with the SEC two years ago. The platform highlighted concerns raised by the SEC regarding the issuance of an ERC-20 token in a blockchain game without proper registration as a security.
CyberKongz has received a Wells Notice from the SEC.
We are extremely disappointed at the approach the SEC has taken towards us, but we are going to stand up and fight for a brighter future that holds more clarity for NFT projects.
We have been suffering in silence for the last… pic.twitter.com/lc6hyzUPb0
— CyberKongz (@CyberKongz) December 16, 2024
The Wells notice indicates that the SEC suspects potential securities law violations and is gearing up to take action against CyberKongz. One of the primary concerns raised by the SEC is the alleged “sale” of Genesis Kongz NFTs in April 2021. CyberKongz, however, defends this as a contract migration rather than a sale.
CyberKongz questions the SEC’s ability to differentiate between a sale and a contract migration, raising doubts about the regulatory clarity for the industry moving forward.
In response to the situation, CyberKongz also accuses the Biden administration of engaging in last-minute enforcement actions, expressing their hope for a more just approach from the new administration.
Recent events have seen other crypto entities like Coinbase and OpenSea receive Wells notices from the SEC, indicating a broader crackdown on the industry.
