CyberKongz Promises to Fight for NFT Industry After Receiving SEC Wells Notice
The United States Securities and Exchange Commission (SEC) could be planning to bring an enforcement action against popular NFT collection CyberKongz. According to an announcement, the development comes as the securities regulator issued a Wells Notice to the project. https://twitter.com/CyberKongz/status/1868746903053127941A Wells Notice is a form of communication the SEC issues to companies following an investigation, hinting that it may recommend an enforcement action against the recipient. CyberKongz Highlights SEC Misunderstanding of Blockchain According to the post, CyberKongz expressed disappointment with the development, noting that it has suffered in silence since the SEC launched its investigation in 2022. The project emphasized that the SEC demonstrated a lack of understanding of blockchain, which resulted in inaccurate information and unjust accusations. Specifically, the SEC claimed that CyberKongz should have registered with the agency for having a blockchain game alongside an ERC-20 token. Additionally, CyberKongz revealed the SEC misinterpreted its contract migration for Genesis Kong NFTs in April 2021 for a token sale. If they cannot distinguish between a primary sale and a contract migration, what hope do we currently have for a clear regulatory pathway going forward? CyberKongz quizzed. CyberKongz to Fight for the NFT Industry Interestingly, CyberKongz plans to defend itself should the SEC decide to file a lawsuit. It promised to fight for regulatory clarity for the NFT sector, irrespective of its small team and limited resources. Furthermore, the project called out the current administration for attempting to push its anti-crypto agenda in its last days in office. It expressed hope for more favorable policies under the forthcoming administration. CyberKongz stands in solidarity with other crypto stakeholders embroiled in similar battles, including Coinbase Co-founder and CEO Brian Armstrong and Uniswap CEO Hayden Adams. SEC Aggressive Stance Against Cryptos Could Change SoonFor context, the Gary Gensler-led SEC has been aggressive against cryptos, filing different charges against crypto businesses. This stringent action has also extended to the NFT sector, with projects like Stoner Cats 2 LLC and Impact Theory victimized. While Stoner Cats 2 and Impact Theory have settled with the SEC, some crypto businesses are still engaged in litigation against the regulator. With Gensler expected to resign on January 20, the fate of other ongoing lawsuits remains uncertain. In the meantime, several enthusiasts speculate that the SEC might settle most of the non-fraud crypto-related lawsuits once Paul Atkins, who was recently nominated as SEC Chair, assumes office. Atkins is a pro-crypto advocate and is expected to introduce transparent and fair policies for the sector. SEC Wells Notice Against Crypto Firms Meanwhile, CyberKongz is not the only crypto project that has received a Wells Notice from the U.S. SEC. Last month, the securities agency slapped the NFT project Immutable with a Wells Notice, causing the projects native token IMX to plunge by 13%. It also issued a Wells Notice to Ethereum developer Consensys earlier this year. The agency subsequently filed a lawsuit against the company, alleging that Consensys violated federal securities laws via its staking service and operated as an unregistered broker-dealer. Notably, Consensys also filed a lawsuit against the SEC, which a Texas court later dismissed in September. Other crypto-related recipients of the SEC Wells Notice include Coinbase in March 2023, Uniswap in April 2024, Robinhood in May 2024, and Crypto.com in August 2024. While the regulator has officially charged Coinbase with operating as an unregistered broker-dealer in the U.S., it has yet to sue Uniswap and Robinhood. Meanwhile, Crypto.com sued the SEC in October 2024 to prevent future enforcement action from the regulator.
Text source: The Crypto Basic