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CyberKongz hit with SEC Wells notice as NFT price rises to $26,900

CyberKongz hit with SEC Wells notice as NFT price rises to $26,900

GrafaGrafa2024/12/17 05:50
By:Isaac Francis

CyberKongz, the NFT platform, has received a Wells notice from the U.S. Securities and Exchange Commission (SEC), signaling the possibility of enforcement action.

The SEC raised concerns about the issuance of an ERC-20 token linked to a blockchain game without first registering it as a security.

CyberKongz described the SEC’s actions as having “major implications” for the Web3 gaming sector, stating it would “defend against this stance for the wider space.”

A Wells notice is a formal notification from the SEC after a preliminary investigation, informing the company that an enforcement action is being considered.

CyberKongz has 30 days to respond.

One of the SEC’s concerns revolves around the “sale” of Genesis Kongz NFTs in April 2021.

However, CyberKongz clarified that the event was a contract migration, not a primary sale.

The company highlighted that it had not raised external capital and operates with a small treasury.

It also expressed frustration over the SEC’s investigation, noting that it has been “suffering in silence” since the SEC first contacted the platform two years ago.

“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 firm added, describing the enforcement action as a last-minute attempt by the Biden administration to hinder the industry.

CyberKongz has received support from Jihoz Zirlin, one of the founders of Axie Infinity (CRYPTO:AXS), who expressed confidence that the new administration would halt the regulatory actions against the sector.

Despite the regulatory challenges, the price of CyberKongz NFTs has not been impacted.

The floor price rose by 11.7% in the past 24 hours to 6.69 Ether (CRYPTO:ETH), approximately $26,900.

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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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