The Securities and Exchange Commission (SEC) has ended its two-year investigation into the CyberKongz NFT project. The inquiry specifically focused on misleading claims made about the project’s BANANA token. It asked the question of whether that token ought to have been registered as a security. Today, CyberKongz posted an announcement that they have officially closed out the investigation. This is a tremendous accomplishment for the project as it prepares for an exciting rebranding and new endeavors.
The SEC's enforcement team had been scrutinizing CyberKongz's BANANA token, which functions alongside its blockchain game. In December 2024, CyberKongz received a Wells Notice, indicating that the SEC staff might recommend an enforcement action against the project. The inquiry suggested that tokens created and sold in connection with blockchain-based videogames might need to be registered as securities.
Back in 2021, CyberKongz released their genesis NFT collection on Ethereum. Since then, they’ve grown, adding several new companion collections, including one to support the Ethereum gaming sidechain, Ronin. Recently, in 2023, CyberKongz migrated its Play & Kollect game to Ronin. At one point, a single collection from the project’s flagship collection had brought in more than $300,000 in revenue. Now, it starts at $5,447 in ETH, based on NFT Price Floor.
Investigation Details and Project Response
The basis of the SEC’s investigation into CyberKongz likely focused on whether the BANANA token is a security. Industry and enforcement perspective The enforcement team expressed alarm over tokens associated with blockchain-based games, questioning whether they should have been registered securities. That scrutiny resulted in a Wells Notice in December 2024, indicating intent to pursue enforcement action.
CyberKongz has been fully collaborative with the SEC’s investigation from the beginning. The team has always firmly believed that our BANANA token is not a security. The leadership of the ambitious project has voiced their relief and optimism after the investigation’s closure.
“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.” - CyberKongz
Future Plans and Rebranding
With the SEC investigation now closed, CyberKongz is planning a full rebrand and charting a new course for the project. The focus for the team, though, is to get back to their foundational principles and improve upon the community they’re building. More information about the rebrand and new direction should be coming soon.
“We have been preparing for this day for a long time. A full rebrand and new direction for CyberKongz will be announced soon.” - CyberKongz
CyberKongz creator, and crossover artist Myoo was optimistic about the roadmap ahead for the project. Most importantly he emphasized the grit and tenacity of his team to keep pushing new developments in the Web3 space. Ultimately, the success of the project will be measured by how well it deepens community engagement while providing one-of-a-kind experiences.
“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.” - Myoo
Market Impact and Broader Implications
The SEC has also recently closed an investigation into CyberKongz. This concludes yet another case in the string of crypto investigations that have closed since Trump took office. This evolution could contribute to larger trends regarding the regulatory framework that will govern NFTs and blockchain gaming tokens. The SEC has chosen not to pursue enforcement action against CyberKongz. This decision has the potential to provide useful clarity for other projects in the arena.
CyberKong NFT collection, as well as the price of the BANANA token, may see price volatility in the wake of this announcement. We’re sure investors and community members alike will be looking on with great interest as this big project rolls out its rebrand and new approach. Though limited in scope, the result of this case could shape the way the SEC regulates similar projects moving forward.
