TLDR:
- CyberKongz announced the SEC has closed its two-year investigation
- The project had received a Wells Notice in December indicating potential enforcement action
- The SEC’s scrutiny focused on BANANA tokens used alongside blockchain gaming
- CyberKongz joins other crypto firms like Yuga Labs and OpenSea that have seen investigations end
- The project plans a “full rebrand and new direction” following the closure
The NFT collection CyberKongz announced on Tuesday that the U.S. Securities and Exchange Commission (SEC) has closed its investigation into the project, allowing the team to move forward with a planned rebrand. This development adds to a growing list of ended crypto investigations since President Donald Trump took office in January 2025.
“After years of litigation, unjust allegations, crippling legal fees, and the biggest hurdle we could possibly encounter—we are free,” CyberKongz posted on X. The project expressed pride in fighting “this battle for the betterment of Web3.”
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 investigation had been ongoing for approximately two years. In December 2024, CyberKongz revealed it had received a Wells Notice from the SEC, which signals that agency staff may recommend enforcement action against a firm.
The Investigation Focus
The SEC’s investigation reportedly centered on CyberKongz’s use of its BANANA token (an ERC-20 token) alongside a blockchain game. According to statements from CyberKongz, SEC enforcement raised concerns about whether tokens used in conjunction with blockchain games should be registered as securities.
“The SEC’s enforcement team brought up very concerning rhetoric that you cannot have a token in tandem with a blockchain game without registering it as a security,” the project explained in earlier communications. The Genesis Kongz contract migration in 2021 was also under scrutiny, with regulators apparently interpreting it as a token sale.
CyberKongz leadership believes this outcome will provide clarity for other projects developing in the Web3 gaming space. The investigation’s conclusion removes a cloud that had been hanging over the project’s operations.
Changing SEC Approach
The dropping of the CyberKongz investigation appears to be part of a broader shift in the SEC’s approach to crypto regulation since the beginning of 2025. Under the Trump administration, the SEC has ended legal pursuits against several major crypto firms.
Companies including Coinbase, OpenSea, Kraken, Consensys, and Uniswap have seen their cases suspended or dropped in recent months. This represents a marked change from the approach under former SEC Chair Gary Gensler, who had taken a more cautious stance toward the industry.
The SEC declined to comment on closing the CyberKongz probe when contacted by media outlets. This is consistent with the regulator’s responses to other recent announcements about ended investigations.
A New Direction
With the investigation closed, CyberKongz expressed relief and excitement about its future plans. “As for CyberKongz, the shackles are lifted,” the firm stated. “We have been preparing for this day for a long time.”
The pseudonymous CyberKongz creator and artist Myoo shared on X: “We have taken some hard hits; but ultimately we have come through the other side—stronger and more determined than ever. The next chapter involves going back to our roots and doing what Kongz does best.”
A full rebrand and new direction for CyberKongz will be announced soon, according to the project. This suggests the team has been developing plans in anticipation of a positive resolution to the SEC matter.
CyberKongz is not alone in celebrating the end of SEC scrutiny. In early March, Bored Ape Yacht Club creator Yuga Labs announced the closure of its SEC investigation, calling it a “huge win” for NFTs.
The SEC has also created a crypto task force, now led by longtime industry advocate Hester Peirce. The task force held its second roundtable last week as part of a series of meetings to discuss regulating the industry.
NFTs have been a focus of SEC attention in recent years. The agency previously charged Impact Theory and Stoner Cats 2 LLC with unregistered offerings of non-fungible tokens. OpenSea, the leading centralized NFT marketplace, is now pushing the SEC to clarify that NFT marketplaces do not qualify as exchanges or brokers under federal securities laws.
The resolution of the CyberKongz investigation may provide a template for how similar projects can operate within regulatory boundaries going forward. For now, the project and its community can look ahead to what the team describes as its next chapter.
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