The U.S. SEC has officially closed its investigation into NFT gaming project CyberKongz, four months after the project was hit with a Wells notice over its ERC-20 token integration.
In a recent post, the CyberKongz announced that the financial agency has pulled the plug on its initial investigation into the project’s operations. Calling it a “win for our industry,” the web3 gaming and NFT project plans to do a complete rebrand following the landmark decision.
“After years of litigation, unjust allegations, crippling legal fees, and the biggest hurdle we could possibly encounter – we are free. This is an extremely proud moment for CyberKongz,” said the account in its post.
Following the decision, the NFT project expressed optimism for the future of Web3, as it believes that the result will serve to provide clarity for other projects in the Web3 space that are exploring blockchain technology, NFT and gaming.
“We are certain this result will provide clarity to many projects innovating with blockchain technology, pushing the boundaries of Web3 gaming, and ultimately showcasing the beauty of NFTs,” continued the project.
Last December, the U.S. SEC issued a Wells notice to the NFT gaming project. The formal warning contained concerns the agency had about CyberKongz’s ERC-20 integration into one of its blockchain-based games. It claimed the tokens fall under securities and had to be registered first, similar to many other crypto lawsuits that plagued firms like Ripple (XRP) and Helium (HNT).
The CyberKongz team said they were “extremely disappointed at the approach the SEC has taken” and vowed to fight back. The team argued the results of such a case could have major consequences towards the web3 gaming and NFT sectors.
Previously, the agency also took issue with the project’s Genesis Kongz contract migration in 2021, which is viewed as a primary sale. CyberKongz argued that the SEC had misinterpreted the user of smart contracts and accused the regulator of failing to make a distinction between technical processes and actual token sales.
Under the new Trump administration, the federal agency has dropped multiple lawsuits against crypto and Web3 firms, most notably Kraken, Coinbase, Consensys, Robinhood, XRP among others.
