SEC Ends Two-Year Probe on NFT Platform CyberKongz

After over two years, the United States Securities and Exchange Commission (SEC) has officially concluded its inquiry into CyberKongz, an NFT and Web3 gaming platform. According to their X post, the investigation closure brings a huge sense of relief and vindication to the team behind the project and its supporters.

“After years of litigation, unjust allegations, crippling legal fees, and the biggest hurdle we could possibly encounter – we are free. This is an extremely proud moment for CyberKongz,” the team wrote.

Background of CyberKongz and SEC Legal Dispute

CyberKongz’s legal issues with the SEC began in December 2022 when the regulatory body questioned the project’s rights to integrate an ERC-20 token in its operations as a blockchain-based game. Although it was publicly disclosed in December 2022 upon receiving a Wells notice, the project stated that they had been suffering in silence since they were first contacted two years prior.

The SEC classified the NFT token as a security that needed to be registered under U.S. law, implying that CyberKongz launched an unregistered security. In response, the project expressed its disappointment in the SEC’s action, claiming that the accusations were unjust and stemmed from a complete lack of understanding of how blockchain technology and smart contracts work.

They also cited that the body objected to the platform’s Genesis Kongz contract migration in April 2021, which was a technical upgrade and not a primary sale. They went further to question the organization’s ability to properly regulate crypto activities and shared their intentions to contest their stance and advocate for clearer regulations for NFT projects.

What’s Next?

CyberKongz described the effects of the two-year-long regulatory scrutiny as a significant burden on the team and its operations.

The team expressed confidence that the SEC’s decision would positively impact similar projects in the NFTs and Web3 gaming sectors. They then stated that they would announce a full rebrand and new direction soon.

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