Web3 gaming platform CyberKongz has received a Wells Notice from the United States Securities and Exchange Commission (SEC) over its NFT endeavors. CyberKongz disclosed that it has been on the financial agency’s radar since April 2021 after sales of the Genesis Kongz.
CyberKongz, themed around “weird apes,” is a play-to-earn game offering diverse community utilities, including NFTs, crypto tokens, and more. A month after its debut in March 2021, the ape-themed project introduced its first PFP collection, Genesis Kongz. Since then, it has rolled out several collections solely or in collaboration with other brands.
Following the SEC’s crackdown, CyberKongz argues that the financial agency lacks adequate knowledge of blockchain technology and smart contracts. The gaming platform added that this “complete lack of understanding” has “resulted in unjust accusations and information inaccuracies.”
A Wells Notice is a letter the SEC sends to individuals or projects after concluding an investigation. The letter indicates an impending enforcement action by the regulatory agency for an alleged securities law violation.
Despite being a small team and not having a large treasury, CyberKongz said it would fight for a more straightforward regulatory pathway for digital assets on the blockchain. The ape-themed project added that it would stand alongside other blockchain projects the SEC has recently probed, such as Coinbase, OpenSea, and Uniswap.
Recall that OpenSea was served a Wells Notice regarding its NFT operation in August. At the time, the NFT marketplace’s co-founder, Devin Finzer, revealed a $5 million contribution to cover legal fees to help creators in a potential SEC lawsuit. The following month, the New York-based restaurant Flyfish Club agreed to pay the SEC $750,000 as a settlement over its NFT business.
CyberKongz hopes the new U.S. administration will end the tussle between the SEC and the non-fungible ecosystem. The platform’s commitment to fight for clarity on NFT regulation shows its undying wish for the non-fungible realm to flourish.
