The US Securities and Exchange Commission (SEC) has concluded its probe into CyberKongz, an esteemed NFT and gaming initiative on the Ethereum platform, without taking any regulatory actions, as reported by the team on Tuesday. This marks a significant turn of events for CyberKongz, wrapping up a challenging period characterized by allegations they deemed baseless, steep legal costs, and formidable obstacles. The project, famed for its pixelated gorilla avatars and expansive metaverse gaming environments, had emerged as a beacon of the regulatory ambiguities in the Web3 domain.
In December, the SEC issued CyberKongz a Wells notice, which the team interpreted as the SEC’s unclear stance towards the operation of smart contracts. A key point of contention was the alleged April 2021 sale of Genesis Kongz, which the team clarified as not a sale of tokens but a migration of contracts. This differentiation highlights a critical issue regarding the clarity of existing regulations on cryptocurrencies, as the inability of the SEC to distinguish between a sale and a technical update raises substantial concerns.
### Regulatory Climate Shows Signs of Relaxation
As the SEC begins to soften its stance towards cryptocurrency ventures, CyberKongz’s situation is part of a broader trend of the agency pausing or discontinuing several notable investigations. These include inquiries into various other crypto platforms, while some investigations, like those into Binance and OpenSea, are still ongoing. This change in enforcement aligns with a broader political shift, notably after the commencement of the second Trump administration and the subsequent resignation of SEC Chair Gary Gensler. Shortly thereafter, a new Crypto Task Force was established to forge clearer regulations for the industry, signaling a move towards a more cooperative regulatory framework.
### A Milestone for Web3 Innovators
CyberKongz, initially a creation of artists and developers that rose to prominence during the NFT surge of 2021, has evolved into a significant gaming and metaverse project. The legal victory is portrayed by the team as a triumph not solely for themselves but for the broader Web3 community. It underscores their commitment to battling for the future of Web3, suggesting an impending rebrand and strategic shift. With this resolution, CyberKongz is optimistic about the positive message it sends to other blockchain endeavors, encouraging continued innovation and development within the space.
“This marks an exceptionally proud moment for us at CyberKongz. We’re a small, passionate team dedicated to the Web3 world, and today’s victory is a testament to our resilience. #CyberKongz #NFT #Web3 #SEC”
