CyberKongz Receives Wells Notice from SEC, Vows to Fight for NFT Clarity
The NFT collection CyberKongz said the Securities and Exchange Commission (SEC) will likely charge it.
In a post on X on Monday, the collection said it received a Wells Notice, a letter from the SEC staff that recommends an enforcement action. It commented that the SEC is trying to pull through its laws before Joe Biden’s administration is over.
CyberKongz: “We Will Not Be Silenced”
In a recent post on X, CyberKongz revealed that it received a Wells Notice. A Wells Notice is a formal letter from the SEC staff notifying a company that the staff intends to recommend an enforcement action.
CyberKongz has received a Wells Notice from the SEC.
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.
We have been suffering in silence for the last… pic.twitter.com/lc6hyzUPb0
— CyberKongz (@CyberKongz) December 16, 2024
In a statement, the NFT collection said it was disappointed with the approach of the SEC and vowed to stand up for and fight for greater clarity in the NFT space.
The collection shared that, for the past two years, it remained silent in response to SEC inquiries. The SEC was concerned that combining an ERC-20 token with a blockchain game could be considered a security.
It also mentioned that the SEC raised concerns about its business with Genesis Kongz in April 2021, describing it as a “contract migration.”
It said:
“They cannot distinguish between a primary sale and a contract migration. What hope do we have for a clear regulatory pathway moving forward?”
CyberKongz added it intends to fight for clearer crypto regulation, particularly regarding NFT projects.
Eyeing Trump’s Crypto-Friendly Stance
The NFT collection has been vocal about the current administration, which it claims is anti-crypto in its approach. Just recently, as the US Senate Banking Committee was preparing to vote on SEC Commissioner Caroline Crenshaw’s renomination, lawyer Bill Hughes raised concerns about her stance on cryptocurrency regulation. Hughes argued that her renomination one could see as politically hostile to the crypto industry. This stands in contrast to the increasing support for crypto-friendly policies under the incoming administration.
CyberKongz is optimistic that the new administration will provide a more level playing field with a more just regulatory framework. In the meantime, the team comited to support all NFT projects on every blockchain platform.
In the past year, the SEC has acted against several cases related to NFTs. This includes lawsuits against podcast studio Impact Theory and Stoner Cats 2 LLC over unregistered NFT offerings that raised millions. The commission also doled out a Wells Notice to NFT marketplace OpenSea, signaling potential enforcement action.
It is up to wait and see how this enforcement will unfold in the transition of the commission’s leadership. The current SEC Chairman Gary Gensler announced his departure on January 20, in concert with the inauguration of President-elect Donald Trump. Trump has named former SEC Commissioner Paul Atkins, considered friendlier to the crypto industry, as the head of the SEC.
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