SEC Hits Gaming Firm CyberKongz With Wells Notice, Clash Over ‘Sale’ of Genesis Kongz
NFT project CyberKongz announced that it received a Wells Notice from the U.S. Securities and Exchange Commission (SEC). When the SEC believes a company has violated securities laws, it typically issues a Wells Notice indicating possible enforcement action.
The team behind CyberKongz expressed disappointment with the SEC’s approach, claiming the regulator lacked understanding of blockchain technology. They believe this has led to inaccurate accusations and confusion about their project.
CyberKongz has been in contact with the SEC for over two years, with the most recent issues surrounding the integration of ERC-20 tokens and blockchain gaming. CyberKongz is committed to opposing this stance, not only for their own project, but also for the broader NFT and blockchain gaming community. “We have suffered in silence for the past two years since we were first contacted by the SEC,” they said.
A key point of contention between the SEC and CyberKongz involves the April 2021 “sale” of Genesis Kongz. The CyberKongz team explains that this is actually a contract migration, not a sale. They believe that if the SEC cannot distinguish between primary sales and contract migration, it will raise concerns about the clarity of future digital asset regulatory guidance.
The CyberKongz team also expressed concerns that the current administration may be pushing an anti-encryption agenda. However, they believe the new government will bring more fairness to the regulatory environment.
In its statement, CyberKongz also expressed solidarity with other leaders in the field, such as Brian Armstrong, Devin Finzer and Hayden Adams, who are also fighting for clearer regulations. “This is a new beginning for the CyberKongz community. A country without us bearing the burden of silently working in pain and fear,” they concluded.
