NFT Gaming Platform CyberKongz Refuses to Back Down After Receiving a Wells Notice from the SEC

CyberKongz is the second known NFT brand to have been targeted by the SEC this year after the regulator issued a Wells notice to NFT marketplace OpenSea

CyberKongz, a popular NFT brand and gaming platform, has disclosed that it received a concerning approach from the U.S. Securities and Exchange Commission (SEC) regarding its Web3 game and native token structure.

According to a statement posted by the CyberKongz team on Monday night, the SEC contacted the team "with very concerning rhetoric that you cannot have a token (ERC-20) in tandem with a blockchain game without registering it as a security."

The NFT project's team argued that such a stance from the regulatory agency would significantly impact the entire Web3 gaming segment, and they stated that CyberKongz will "defend against this stance for the wider space."

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.

It is unclear when exactly the CyberKongz team received a Wells notice from the SEC. However, the team mentioned that they "have been suffering in silence for the last two years" after the SEC first contacted them.

"Throughout the entire process they have showcased a complete lack of understanding of blockchain technologies that has resulted in unjust accusations and information inaccuracies," the NFT project's team added.

The news quickly spread throughout the cryptocurrency community, with many showing their support for the CyberKongz team and criticizing the SEC's approach toward the NFT industry.

Prominent NFT figure @seedphrase commented on the situation, stating that he feels sorry that CyberKongz has to go through the same struggle that other crypto firms had and are still having, calling for "better understanding and clarity in the government" regarding NFTs.

"A win for CK is a win for everyone. All my support in the fight," Web3 Dojo founder @andresins.ron commented, referring to CyberKongz.

Many other crypto figures commented on the CyberKongz team's post, wishing them good luck in their "fight for this space."

Keep up the good fight for this space Unbelievable. Fight, fight, fight!

CyberKongz received a Wells Notice from the SEC.

If you were here in 2021, this hits hard.

This team has always been building through the trenches.

I still remember when they migrated to Ronin

A move that inspired me to start creating… pic.twitter.com/pVygSGFDCN

The SEC, under the leadership of Gary Gensler, has been ramping up its scrutiny of the crypto industry, particularly focusing on digital asset exchanges and offerings.

Recently, the SEC filed a response to crypto exchange Binance's bid to dismiss a lawsuit from the regulator over the exchange's sales of its BNB token and other tokens, aiming to block the exchange's attempt to get out of the legal battle.

There are concerns that Gensler, who has been accused by the crypto community of targeting the crypto space since he became the SEC chief, will continue to attack the broader blockchain and crypto space until he finally leaves office on Inauguration Day.