The well-established NFT project CyberKongz recently announced that it has received a Wells Notice from the U.S. Securities and Exchange Commission (SEC), which indicates that the SEC may take enforcement action against it. The market is concerned about whether NFT projects constitute 'securities' and the potential impact on the entire Web3 gaming industry. (Background: Multiple NFT projects have seen a resurgence! The floor price of Mocaverse has surpassed 2.9 ETH, with a daily increase of 79%) (Additional background: The floor price of Fat Penguins NFT has reached a new high! Starting at $122,000, the community is clamoring for a PENGU airdrop of at least $30,000) Today (17), the established NFT project CyberKongz posted on X, stating that the team received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) two years ago. This notice is a formal communication from the SEC before it may take enforcement action, aimed at informing the entity that legal measures might be taken against it. CyberKongz: SEC's Lack of Understanding of Blockchain Technology The CyberKongz team stated that since first receiving contact from the SEC, they have quietly endured nearly two years of investigation. During this period, the team criticized SEC staff for their insufficient understanding of blockchain technology, which has led to unjust accusations and the spread of misinformation about the project. According to the CyberKongz team, the SEC's enforcement division has raised serious concerns, believing that the project cannot combine its token (ERC-20) with blockchain gaming unless it registers the token as a security. If this position is established, it will have far-reaching implications for the entire Web3 gaming field. CyberKongz stated: For the CyberKongz community, this is a new beginning. A time without the burden of suffering silently and working in fear. Now is the time for CyberKongz to move forward without obstacles. We firmly believe that we will all usher in a brighter era. CyberKongz Twitter CyberKongz Ecosystem and BANANA Token Mechanism The CyberKongz ecosystem includes: Genesis, Baby CyberKongz, VX, Genkai, and it also features complex ecological mechanisms where the BANANA token plays an important role. According to 0xdaily's introduction, BANANA tokens are used for voting on proposals and are part of the project's governance. In addition, BANANA has various functionalities: Airdrop: Holders of CyberKongz can receive 10 BANANA tokens daily until 2031. Breeding: BANANA tokens can be used to breed Baby Kongz. Participation in games and adventures: Users can use 0.4 BANANA to have CyberKongz VX enter jungle adventures, collect exclusive NFTs, and compete for seasonal BANANA prize pools. Voting rights: Users holding BANANA tokens can exercise voting rights in the CyberKongz DAO, influencing the future development of the project. Legal Risks for NFT Projects? This is not the first time the SEC has targeted an NFT project. Last September, the NFT animated series Stoner Cats, voiced by numerous Hollywood stars including Mila Kunis, reached a settlement with regulators for $1 million, with the SEC accusing the production entity Stoner Cats 2 LLC of conducting an unregistered issuance of crypto asset securities. In August of this year, OpenSea disclosed that it had received a Wells Notice from the U.S. Securities and Exchange Commission (SEC), meaning that this leading NFT company might be prosecuted for violating securities laws. Ryan Sean Adams, co-founder of Bankless, stated: "The SEC is currently planning to sue OpenSea on the grounds that NFTs are securities, and it is clear that Gary Gensler indeed believes that tokenized Pokémon cards are securities. OpenSea is now the sixth U.S. crypto company to be successfully targeted by the SEC this year - they are now targeting the FANNG of the U.S. crypto industry: Metamask, OpenSea, Coinbase, Kraken, Uniswap, Robinhood (referred to as MOCKUR), Gensler is destroying your constitutional rights to own cryptocurrency. By attacking our healthiest and most legitimate companies, they are in fact attacking ordinary American citizens. All of this is happening under the leadership of the Biden administration, with factions in the White House orchestrating it all, seeking to stifle cryptocurrency in America. The BANANA tokens used by CyberKongz serve as both in-game currency and have investment return characteristics. This has led some observers to question whether NFT projects are regarded as akin to securities due to the expectation of returns. Especially in the U.S., the Biden administration's stance on blockchain and cryptocurrency is not friendly, while Trump is set to return to power. Although the Trump family has a relatively friendly attitude toward decentralized finance (DeFi), they remain conservative in their actual involvement in NFTs and have not yet made large-scale purchases of related assets. This has also raised more doubts in the market about future regulatory policies and sparked concerns about the new government's position in the blockchain and NFT space, which we will need to observe. Further reading: The SEC sees NFTs as securities causing waves, how do various big shots respond? Related reports: Multiple NFT projects are seeing a resurgence! The floor price of Mocaverse has surpassed 2.9 ETH, with a daily increase of 79%. The floor price of Fat Penguins NFT has reached a new high! Starting at $122,000, the community is clamoring for a PENGU airdrop of at least $30,000. "Fat Penguins" previewed the issuance of the token $PENGU, revealing the public tokenomics, FTT holders can also receive airdrops. The NFT floor price has skyrocketed. "The well-established NFT 'CyberKongz' received a Wells Notice: SEC attempts to undermine the entire Web3 gaming ecosystem..." This article was first published by BlockTempo (the most influential blockchain news media).

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