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The United States Securities and Exchange Commission continues reducing hostility towards crypto and non-fungible token projects. In yet another bullish move, the regulatory commission has ended an investigation into CyberKongz, a renowned non-fungible token project created on Ethereum. Previously, the United States SEC was known for its harshness to the crypto and NFT projects.
The SEC Drops Probe Into CyberKongz
In an April 15 blog post, the CyberKongz team confirmed that the United States Securities and Exchange Commission has dropped its investigation into their non-fungible token and gaming projects. Launched in March 2021, CyberKongz is a non-fungible token project featuring a limited edition of 1,000 randomly generated 2D and 3D avatars of gorillas hosted on the Ethereum blockchain network. The NFT collection was created by the digital artist Myoo.
The SEC has officially closed its investigation into CyberKongz.
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. We are a small, passionate,… pic.twitter.com/kU1QOnp4wN
— CyberKongz (@CyberKongz) April 15, 2025
The United States Securities and Exchange Commission issued a well notice to the Cyberkongz NFT team in December 2024, notifying them that an investigation was underway and potential charges were being considered. The regulatory commission raised queries over issuing tokens (ERC-20) along with blockchain gaming. The regulatory agency argued that such tokens must be registered as securities, raising alarm for other projects using similar structures.
CyberKongz has received a Wells Notice from the SEC.
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.
We have been suffering in silence for the last… pic.twitter.com/lc6hyzUPb0
— CyberKongz (@CyberKongz) December 16, 2024
One of their major concerns with CyberKongz was around the sale of Genesis Kongz NFT series in April 2021, which was actually a contract migration. The United States SEC’s Division of Enforcement approached CyberKongz with a very concerning rhetoric that they could not have issued an ERC-20 crypto token in tandem with a blockchain game without registering it as a security.
In response to the well notice, the CyberKongz leadership termed the SEC’s stance a reflection of an “anti-crypto agenda” but expressed hope for regulatory change with new leadership in the U.S. administration. Fortunately, under Donald Trump’s leadership, the United States Securities and Exchange Commission has dropped nearly all investigations into NFT and crypto projects started during Biden’s administration.
Other NFT Projects Acquitted By The SEC
CyberKongz joins a list of crypto and NFT projects acquitted by the United States Securities and Exchange Commission after receiving well notices under the previous regime. Earlier this year, the regulatory agency closed an investigation into OpenSea, one of the leading non-fungible token marketplaces in the NFT market. The agency claimed that all NFT collections on the OpenSea market platform were unregistered securities.
The SEC is closing its investigation into @opensea. This is a win for everyone who is creating and building in our space. Trying to classify NFTs as securities would have been a step backward—one that misinterprets the law and slows innovation.
Every creator, big or small,…
— dfinzer.eth | opensea (@dfinzer) February 21, 2025
In March 2025, the United States Securities and Exchange Commission officially closed its investigation into its NFT company, Yuga Labs. The regulatory commission put Yuga Labs into intense scrutiny three years ago, citing that the digital asset company was trading unregulated securities. Yuga Labs is the digital asset incubation studio behind the popular Bored Ape Yacht Club and Mutant Ape Yacht Club NFT collections.
After 3+ years, the SEC has officially closed its investigation into Yuga Labs.
This is a huge win for NFTs and all creators pushing our ecosystem forward. NFTs are not securities.
— Yuga Labs (@yugalabs) March 3, 2025
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