Posted: December 18, 2024

• CyberKongz receives a Wells notice from the SEC, signaling potential securities law violations.
• Despite regulatory scrutiny, CyberKongz NFTs have seen a 14.7% increase in floor price.

CyberKongz has found itself at the center of regulatory scrutiny after announcing that it had received a Wells notice from the SEC.

This has raised concerns about potential securities law violations related to its ERC-20 token and associated blockchain game.

This development arises as the SEC underscores concerns over the issuance of tokens without proper registration as securities.

CyberKongz decides to fight back

Expressing distress on the same, the project said in an X post, 

“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.” 

Further in the post, CyberKongz expressed frustration over their prolonged engagement with the SEC.

They stated that, for the past two years, they have faced unjust accusations due to the regulator’s lack of understanding of blockchain technologies.

The project believes that the recent enforcement action is a politically motivated attempt by the Joe Biden administration to hinder the growth of the crypto industry.

Additionally, CyberKongz emphasized inaccuracies in the information provided. They asserted that the move was unjust and detrimental to the innovation and progress within the space.

“We hope that the new administration puts an end to this unjustness on our industry, but until then we will fight for NFT projects on all chains.”

Community stands in support

Amidst this ongoing concern, Jihoz Zirlin, co-founder of Axie Infinity, has shown support for CyberKongz.

He expressed confidence that the new administration will put an end to the perceived persecution faced by blockchain projects.

Zirlin said,

“You know you’re part of a revolution when you start to become persecuted. I stand with CyberKongz.”

Impact on CyberKongz NFT collection

Despite the recent Wells notice from the SEC, which raised concerns over potential securities law violations, the NFT collection has maintained a solid rise.

According to CoinGecko data, it saw a 14.7% increase in floor price over the last 24 hours, reaching an average of 8.20 Ether [ETH], equivalent to $32,982.

This highlights that CyberKongz NFTs, known for their unique two and three-dimensional social avatars, continue to gain popularity on the Ronin blockchain.

For those unaware, CyberKongz is not the only one to go through this. NFT platforms like OpenSea and Immutable highlight the ongoing scrutiny by the SEC over the classification of digital assets.

While OpenSea has vigorously defended the creative freedom of artists on its platform, Immutable remains cautious, having not reported any enforcement actions thus far.