- The SEC has officially closed its investigation into CyberKongz, with no enforcement action taken
- The probe focused on the project’s BANANA token, blockchain gaming elements, and a 2021 smart contract migration
- CyberKongz has expressed relief and plans to refocus on its core creative endeavors
The U.S. Securities and Exchange Commission (SEC) has concluded its investigation into Ethereum-based NFT and gaming project CyberKongz without pursuing any enforcement actions. The inquiry scrutinized aspects such as the project’s BANANA token, its blockchain gaming features, and a smart contract migration conducted in 2021. However, the new-look SEC has decided that it will not follow up on the Wells notice issued by the former regime, leaving CyberKongz free to continue building.
SEC Accused of Monkeying Around
CyberKongz, known for its pixelated primate NFTs and immersive gaming experiences, had been under SEC investigation for over two years. In December 2024, the project finally received a Wells notice from the SEC, indicating potential legal action. The SEC’s concerns centered around the issuance of the BANANA token, the integration of blockchain gaming elements, and the migration of its Genesis Kongz NFT contract in 2021, which regulators interpreted as potential unregistered securities offerings.
At the time, the CyberKongz team viewed the SEC’s stance as a misunderstanding of blockchain technology and smart contracts. They argued that the contract migration was a technical update, not a token sale, and criticized the SEC’s approach as “very concerning rhetoric” that could pose risks to the entire Web3 gaming industry. Despite the challenges, the team remained committed to defending their project and the broader Web3 space.
SEC Shutters Investigation
The closure of the investigation has been met with relief and celebration within the CyberKongz community. In a statement on X (formerly Twitter), the project expressed its sentiments:
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
X user @HenrytheGrape, a prominent member of the CyberKongz project, praised the attitude of the team in the face of the SEC’s actions:
The SEC has officially closed its investigation into CyberKongz.
No findings. No enforcement. Case closed.
This brings an end to a chapter that’s been both difficult and defining. For over 2 years we’ve carried the weight of this process, not just as a project, but as a… https://t.co/HmVTsA3NRG
— 🍇Henry the Grape🍇 (@HenryTheGrape) April 15, 2025
The conclusion of the CyberKongz investigation aligns with a broader trend of the SEC easing its enforcement actions against crypto and NFT projects. Other projects, such as Yuga Labs (creators of Bored Ape Yacht Club) and OpenSea, have also seen investigations closed without enforcement. This shift in regulatory approach has been attributed to the change in U.S. administration and the subsequent resignation of SEC Chair Gary Gensler.
