The NFT project CyberKongz announced it received a Wells Notice from the U.S. Securities and Exchange Commission over its integration of ERC-20 tokens with blockchain games.
The SEC’s Argument
On December 16, CyberKongz reported receiving a Wells Notice from the SEC, which raised concerns about the integration of ERC-20 tokens in blockchain games and the 2021 contract migration. The main concern is whether ERC-20 tokens can function within games without being considered securities.
Broader Industry Issue
This development adds CyberKongz to a growing list of blockchain and NFT entities scrutinized by the SEC, including companies like Coinbase, Consensys, Ripple, and others. Australian-based Immutable also recently expressed their frustration over vague allegations by the SEC.
CyberKongz's Next Steps
CyberKongz has reassured its community that it remains committed to advocating for clearer regulatory frameworks. The Wells Notice provides 30 days to respond before the SEC decides on enforcement action.
CyberKongz continues its efforts to seek clearer regulatory guidelines in the NFT and blockchain industries, emphasizing the need for clarity amid regulatory actions.
