SEC maintains NFT project with CyberKongz

The US Securities and Exchange Commission has issued a Wells Notice to CyberKongz NFT gaming project, marking the final regulatory review of an entity of its type.

“The SEC’s enforcement department approached us with the rhetoric that it is impossible to have a token (ERC-20) in tandem with a blockchain game,” the draft reads. message X posted on Monday.

A Wells Notice informs recipients that the regulator is considering enforcement action based on findings from preliminary investigations. Once served, the notice typically gives recipients 30 days to respond before the SEC decides whether to proceed with it.

A full-blown investigation and subsequent charges against CyberKongz could have “major implications” for the blockchain gaming industry, he said, adding that he would “defend this position in the broader space.”

In particular, projects that combine NFTs with utility tokens may be affected. CyberKongz, which operates without venture funding or significant treasury reserves, said it plans to challenge the notice.

CyberKongz: “We have been suffering in silence for the past two years, ever since we first contacted the SEC,” CyberKongz said, claiming that the regulator “doesn’t fully understand blockchain technologies,” resulting in “unfair allegations and inaccurate information.”

CyberKongz and the SEC did not immediately respond Decipheringrequest for comment.

The SEC’s concerns are related to NFT project Genesis Kongz in April 2021 contract migrationAccording to the company’s statement, regulators interpreted the tokens as a sale. CyberKongz believes this was a technical update and not a securities offering.

“If they can’t distinguish between initial sales and contract migration, what hope do we have for a clear regulatory path going forward?” project said.

As a gaming platform, CyberKongz provides users with features like randomly generated 2D and 3D avatar NFT. Ronin Blockchain.

The notice issued to CyberKongz follows the same regulatory review against the NFT platform Immutable in November, where the token sale was also called into question.

“You know you’re part of a revolution when you start getting harassed,” says Jihoz Zirlin, co-founder of Axie Infinity. to comment According to X. “I stand with CyberKongz.”

Despite the launch, the project’s floor price remains stable at 8.2 ETH ($32,800), up 14.4% in 24 hours, according to CoinGecko data shows.

Edited by Sebastian Sinclair