SEC Sends Wells Notice to NFT Project CyberKongz

 
Ritu Lavania
Written By 
Ritu Lavania
December 17, 2024

The NFT project CyberKongz posted on the X platform that it had received a Wells Notice from the U.S. Securities and Exchange Commission (SEC).

SEC Hits CyberKongz With a Wells Notice

The team said, “We have been silently enduring for the past two years since we first received from the SEC. Throughout the process, they showed a complete lack of understanding of blockchain technology, resulting in unfair accusations and inaccurate information.”

The CyberKongz team further shared that even though the project is a project established in the gaming field, the SEC Enforcement Division is of the opninion that if the token (ERC-20) is not ed as a security, it cannot be combined with blockchain games. The project added this kind of rhetoric from the SEC will have a significant impact on the entire web3 gaming industry, and CyberKongz has vowed to oppose this position in a wider range of areas.

Apart from this, the SEC has also shown a “perplexing interpretation of smart contracts”, alleges the NFT project . One of their major concerns with CyberKongz is around the ‘sale’ of Genesis Kongz in April 2021, which was actually a contract migration. CyberKongz has thus, called out the SEC’s inability to distinguish between ‘primary sale’ and a ‘contract migration’ .

The team also alleged that the current SEC regime is trying to push further their anti-crypto agenda at the last minute.

The team expressed gratitude to crypto executives who are relentlessly fighting for crypto, “We stand with @brian_armstrong, @dfinzer,  @haydenzadams, and many others who are leading this fight for our industry.”

Wells Notice is a standard procedure in the regulatory world, and is a means to subject crypto firms to sanctions, penalties, or suspending certain operations altogether. In August, OpenSea, the leading NFT marketplace, too, had received a Wells Notice from the SEC. According to the CEO of OpenSea, Devin Finzer, the notice asserted that under existing federal law, the NFTs on OpenSea are securities and OpenSea was offering uned securities.

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Ritu Lavania
Written by Ritu Lavania

Ritu Lavania is a versatile Web3 content creator with over three years of experience in the crypto space. She is part of the team at CryptoNewsZ, where she writes insightful and engaging content. She has also contributed to TheCryptoTimes and The Coin Edition, where her work has been well received by the crypto community. Skilled in research, creative writing, SEO, and cross-functional collaboration, she creates content tailored to diverse audiences. ionate about education, she dedicates time to teaching kids and expressing herself through poetry. Always eager to learn, she continuously explores new trends in blockchain and digital assets. She believes in the power of storytelling to make complex crypto topics more accessible and engaging for readers worldwide.