CyberKongz faces SEC scrutiny over its ERC-20 token use in blockchain games as a potential security.
CyberKongz vows to fight for clearer NFT regulations amid SEC's enforcement actions.
CyberKongz criticizes current crypto regulations and advocates for a more supportive framework.
CyberKongz, a leading NFT collection, has recently been issued a Wells Notice by the U.S. Securities and Exchange Commission (SEC). This notice shows that the SEC wants to recommend an enforcement action be taken against the company. The SEC has issues with how CyberKongz intends to use an ERC-20 token in its blockchain game. The commission believes this could violate security laws. CyberKongz expressed disappointment with the SEC’s actions and vowed to fight for clearer NFT regulations.
Response to SEC’s Allegations
CyberKongz criticized the SEC for misunderstanding blockchain technology. The project team highlighted that the SEC raised concerns over its business practices. Specifically, a transaction involving Genesis Kongz in April 2021. The SEC mistook the event for a contract migration confusing it with a primary sale. CyberKongz stated that this lack of clarity poses a major problem for future regulation of NFT projects. For the last two years, the collection remained silent in response to SEC inquiries. Now, it has decided to speak up and demand clearer regulations for the NFT space.
Despite being a small team, CyberKongz is determined to fight back against the SEC’s stance. The project has never raised significant capital or had a large treasury. However, CyberKongz believes strongly in innovation within Web3. The collection warns that the SEC’s approach could affect the entire blockchain gaming industry. The team believes the current regulatory framework is hindering growth in the NFT space. CyberKongz wants to protect future NFT projects from similar challenges.
Current Administration’s Crypto Stances
CyberKongz also expressed concerns about the current U.S. administration’s position on cryptocurrency. The collection claims the administration is anti-crypto, as seen in the SEC’s ongoing enforcement actions. This stands in contrast to the crypto-friendly policies that some hope will emerge with the next administration. CyberKongz believes that a more balanced regulatory framework is needed to support innovation. The project is hopeful that the next administration will provide a better environment for NFTs and digital assets.
Supporting the NFT Community
Despite facing legal challenges, CyberKongz remains committed to supporting other NFT projects across all blockchain platforms. The collection views itself as a champion for the broader NFT community. Through its venture, CyberKongz aims to support and sustain the growth of the NFT market. The project will go further and insist on clear and fair regulation for business operations and practices.
Nevertheless, CyberKongz keeps striving to be at the forefront of the innovative process within Web3. The team does not intend to allow its vision of the future of NFTs to be undermined by others.
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