The SEC’s notice raises concerns about the project’s use of tokens in its blockchain game. It claims this may violate security laws.
This has left the CyberKongz team frustrated, but determined to fight for a brighter future for the entire NFT and Web3 gaming industry.
CyberKongz Challenges SEC’s Misunderstanding of Blockchain and Smart Contracts
For the past two years, CyberKongz has been in contact with the SEC, who they say have misunderstood key aspects of blockchain technology. The project’s team believes that the SEC has misinterpreted the use of tokens and smart contracts in gaming.
The SEC’s primary concern is that you cannot have a token alongside a blockchain game without registering it as a security, a claim that CyberKongz argues is not only inaccurate but also could affect the entire Web3 gaming 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.
We have been suffering in silence for the last… pic.twitter.com/lc6hyzUPb0
— CyberKongz (@CyberKongz) December 16, 2024
One of the main points of confusion for the SEC involves a contract migration of CyberKongz’s “Genesis Kongz” in April 2021. The SEC mistakenly referred to this as a “sale,” when it was a migration of contracts.
The team argues that this misunderstanding shows how out of touch the SEC is with the way blockchain and smart contracts work. If the SEC can’t tell the difference between a primary sale and a contract migration, CyberKongz fears that the regulatory environment for digital assets will remain unclear.
CyberKongz Fights for Clarity and Fairness in Web3 Gaming
Despite having a small team and no large treasury, CyberKongz is committed to fighting for the future of blockchain-based gaming and the wider Web3 space. The team has always pushed for innovation and breaking down barriers in the world of digital assets. Now, they’re fighting for clearer rules so that other projects won’t face the same struggles.
Cyberkongz team member @HenryTheGrape shares insider info on the SEC wells notice @notthreadguy
“This has been going on for 2 years”
“They wanted everything but a strip search” pic.twitter.com/I8zoBwpNJr
— BlockNews (@blocknewsdotcom) December 16, 2024
CyberKongz says they’ve been working in fear for too long, but now they’re speaking out. They hope their fight will bring more clarity and fairness to the Web3 and NFT spaces. The team is also offering support to other projects that may be going through similar challenges with the SEC.
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