Michaela Alvez
CyberKongz, a prominent non-fungible token (NFT) collection, has received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) indicating the regulator’s intent to pursue charges against the project.
In a post on X, CyberKongz revealed that the SEC’s Wells Notice raised concerns about its ERC-20 token. The regulator claimed it could not operate the ERC-20 token in conjunction with a blockchain-based game without registering it as a security.
The project argued that the SEC’s stance demonstrates a lack of understanding of blockchain technology and could set a concerning precedent for the broader Web3 gaming industry.
“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,” CyberKongz wrote.
The SEC has also shown a puzzling interpretation of smart contracts, according to CyberKongz. A key concern raised by the regulator involves the alleged “sale” of Genesis Kongz in April 2021, which the project clarified was, in fact, a contract migration.
The project questioned the SEC’s ability to provide clear guidance, arguing that its failure to distinguish between a primary sale and a contract migration casts doubt on the possibility of a well-defined regulatory framework for blockchain projects.
CyberKong Reacts, X Users Show Support
In CyberKongz’s lengthy X post, the company vowed to fight back to gain a clearer regulatory pathway for digital assets on the blockchain.
“We have been suffering in silence for the last two years, ever since we first received contact from the SEC,” CyberKongz stated. “Throughout the entire process they have showcased a complete lack of understanding of blockchain technologies that has resulted in unjust accusations and information inaccuracies.”
CyberKongz stated that the current SEC administration is attempting to enforce “their anti-crypto agenda at the last minute.” The company expressed hope that the incoming administration, potentially led by President-elect Donald Trump’s nominee for SEC Chair, Paul Atkins, would put an end to what it described as the “unjustness” targeting the crypto industry.
Several users on X showed their support for the NFT project, with one user echoing CyberKongz’s call for a clearer guide from the government.
CyberKongz, created by artist Myoo, was launched in March 2021. The collection featured 1,000 unique, pixelated gorilla-themed NFTs, known as Genesis Kongz, designed as profile pictures (PFPs). At the time, using NFTs as PFPs was a novel concept, and CyberKongz quickly gained attention for its creative approach.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
