Quick take:
- CyberKongz claims that “SEC’s lack of understanding of blockchain technologies” has resulted in “unjust accusations and information inaccuracies.”
- The SEC accused the project of offering an ERC-20 token in a blockchain game without registering it as a security.
- The company claims this approach from the SEC will have major implications for the entire blockchain gaming industry.
CyberKongz the blockchain gaming project featuring non-fungible tokens of the same name has received a Wells Notice from the U.S. Securities and Exchange Commission.
The notice comes just over a month before the current SEC chair Gary Gensler steps down to pave the way for Trump’s new crypto-friendly administration.
CyberKongz posted on the X platform on Monday accusing the SEC of their “lack of understanding of blockchain technologies,” as a reason for their unjust accusations and information inaccuracies labelled at the NFT project.
“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,” CyberKongz wrote.
“We have been suffering in silence for the last two years, ever since we first received contact from the SEC.”
The company said the U.S. securities watchdog is accusing it of offering an ERC-20 token in tandem with a blockchain game without registering it as a security. CyberKongz believes the kind of discourse such an approach to NFT projects and blockchain gaming would cause would have major implications for the entire industry, adding that it “will defend against this stance for the wider space.”
According to the statement, the SEC is also charging the company for the sale of the Genesis Kongz NFT project in 2021, which CyberKongz argues was actually a contract migration, rather than a sale, adding that it demonstrates a “perplexing interpretation of smart contracts,” by the securities regulator.
“If they cannot distinguish between a primary sale and a contract migration, what hope do we currently have for a clear regulatory pathway going forward?” the CyberKongz team wrote on X.
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