‘Major implications’ for gaming tokens as CyberKongz hit with SEC Wells notice
Gaming tokens may be in for a setback after non-fungible token (NFT) platform CyberKongz received a Wells notice from the United States securities regulator.
The Securities and Exchange Commission (SEC) conveyed the “concerning rhetoric” that an ERC-20 token in tandem with a blockchain game cannot be issued without first being registered as a security, CyberKongz said in a Dec. 16 X post.
This would have “major implications” for the Web3 gaming industry, CyberKongz said, adding that it would “defend against this stance for the wider space.”
Source: CyberKongz
A Wells notice is a formal letter issued by the SEC informing an entity that the regulator has completed a preliminary investigation and is considering an enforcement action. CyberKongz will have 30 days to file a response.
One of the SEC’s issues with CyberKongz stemmed from its “sale” of Genesis Kongz NFTs in April 2021. The NFT firm said that it was a contract migration, not a primary sale.
CyberKongz said it has never raised capital and has been mostly bootstrapped, so it has a small treasury, adding that it has been “suffering in silence” since it was first contacted by the SEC two years ago.
CyberKongz said the enforcement action was a last-minute attempt from the Biden administration to set the industry back, adding:
“We hope that the new administration puts an end to this unjustness on our industry, but until then we will fight for NFT projects on all chains.”
The CyberKongz team has received words of support from one of Axie Infinity’s founders, Jihoz Zirlin, who is “confident that the new administration will end the persecution of our people.”
Source: Coco.kongz.eth
CyberKongz NFTs are randomly generated two and three-dimensional social avatars that can be used in “play & kollect” and “adventure runs” games on the Ronin blockchain.
Related: NFTs will be ‘even bigger’ than they were in 2021 — Animoca’s Yat Siu
The CyberKongz NFT price wasn’t impacted by the Wells notice and is still up 11.7% over the last 24 hours to an average floor price of 6.69 Ether ( ETH ) — worth $26,900, according to CoinGecko data.
CyberKongz NFTs listed on NFT marketplace OpenSea. Source: OpenSea
Cointelegraph contacted CyberKongz for comment but didn’t receive an immediate response.
On Nov. 1, Australian-based NFT and gaming firm Immutable was also served a Wells notice from the SEC, though it hasn’t reported any enforcement actions.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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