TLDR
- CyberKongz announced the SEC has closed its investigation after two years of scrutiny
- The project had received a Wells Notice in December regarding its BANANA token
- CyberKongz is planning a full rebrand and new direction following this development
- The closure joins other ended SEC crypto investigations since Trump took office
- SEC had questioned whether tokens used with blockchain games should be registered as securities
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 planned changes. The announcement, made via the project’s X account, marks the latest in a series of ended probes by the agency since President Donald Trump took office in January 2025.
“As for CyberKongz, the shackles are lifted,” the firm stated in its announcement. “We have been preparing for this day for a long time. A full rebrand and new direction for CyberKongz will be announced soon.”
The investigation had been ongoing for approximately two years. In December 2024, CyberKongz had received a Wells Notice from the SEC, which indicates that the agency’s staff may recommend an enforcement action against a firm.
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
SEC’s Concerns About Gaming Tokens
CyberKongz revealed that the SEC’s enforcement team had expressed concerns about the project’s BANANA token, which functions alongside its blockchain game. According to CyberKongz, regulators had raised the issue that “you cannot have a token (ERC-20) in tandem with a blockchain game without registering it as a security.”
The project’s leadership called this stance “very concerning rhetoric” that could “have major implications for the entire Web3 gaming industry.” Many gaming projects in the blockchain space rely on similar token models.
The SEC declined to comment when asked about the closure of the investigation. This follows their standard practice regarding announcements of closed investigations in recent weeks.
Pseudonymous CyberKongz creator and artist Myoo expressed relief on X, stating: “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.”
Trend of Ended Investigations
The CyberKongz case is part of a broader trend of the SEC ending investigations into crypto firms since the beginning of 2025. Other companies that have seen their legal pursuits ended include Coinbase, OpenSea, Kraken, Consensys, and Uniswap.
This marks a shift from the previous approach under former SEC Chair Gary Gensler, who took a more cautious stance toward the crypto industry. Gensler had classified most cryptocurrencies as securities and brought charges against several major firms.
The current SEC has created a crypto task force led by commissioner Hester Peirce, a longtime industry advocate. The task force recently held its second roundtable as part of a series of meetings to discuss regulating the industry.
In early March, Bored Ape Yacht Club creator Yuga Labs also announced that its SEC investigation had been closed, calling it a “huge win” for NFTs. Similarly, NFT marketplace OpenSea had its investigation dropped in late February, though it is still seeking clarity on NFT marketplace rules.
CyberKongz launched its genesis NFT collection on Ethereum in 2021. The project has since expanded to include multiple companion collections, including one on Ethereum gaming sidechain Ronin, where it migrated its Play & Kollect game in 2023.
While once commanding sales above $300,000, the project’s flagship collection now starts at a price of $5,447 worth of Ethereum, according to NFT Price Floor.
The project’s team expressed their perspective on the investigation:
“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, and creative Web3 team that elected to fight this battle for the betterment of Web3.”
