So, on its face, the news that the SEC has closed its two-year investigation into CyberKongz is a huge win for Web3. Don’t be fooled. This is a blatant red flag. It underscores the SEC’s dangerously naive approach to this rapidly evolving space and raises alarm bells about the harm it may cause to everyday investors, especially those who can least afford to be burned. Consider it like the Titanic continuing to sail full steam ahead after spotting an iceberg, yet refusing to change course.

Are Vulnerable Investors Really Protected?

Let's be frank: the world of NFTs and crypto is still largely the Wild West. CyberKongz can look back on the end of their investigation with at least some victory. What about the people who invested, lured in by the siren song of riches and revitalization, only to see their investments crash and burn? The price of CyberKongz NFTs has fluctuated greatly, peaking at over $300,000 with a current floor price of about $5,447. Who exactly is looking out for the unseen faces of those who purchased at inflated bubble prices?

The SEC’s excessive focus on the BANANA token, though an understandable direction, loses sight of the more significant issue. If they’re really concerned about people registering a new token as a security, then. Or are they simply chasing shadows as market manipulation and lack of transparency continues to run rampant on their watch—aka playing whack-a-mole? It’s like treating the symptom and missing the disease.

Here’s where the social justice aspect comes in. Who are the people that are most likely to be sucked into these speculative markets, too frequently without appropriate financial literacy. Frequently, it’s people in marginalized communities, people who view crypto as a means of leaving behind systemic financial inequities. Is that really the best we can do—to abandon these folks to suffer in isolation? They are constantly attacked by dangers, like the proverbial sharks in water.

Is the SEC's Compass Pointing the Right Way?

Stakeholder involvement and closure of the CyberKongz investigation are growing trends. Coinbase, OpenSea, Kraken, Consensys, Uniswap – all apparently out of the woods. This change follows the formation of a new SEC task force, headed by an industry darling from the Trump administration. It raises alarming questions about the agency’s real priorities. Are they really putting investors’ interests and protection first, or are they doing the bidding of the deep crypto pockets?

Let's be clear: no one is arguing for stifling innovation. Yet innovation without regulation is a recipe for disaster. It’s the same as giving a kid a loaded gun and just hoping they’re responsible. We need clear rules of the road, transparency, and accountability to ensure that Web3 benefits everyone, not just a select few.

Yet the SEC’s sudden retreat seems a betrayal of its own admirable core mission. It is the abandonment of the federal government’s fundamental obligation to safeguard those most in need.

Web3's Future: Utopia or Dystopia?

That’s why we believe that Web3 has the potential to revolutionize finance, create new opportunities, and empower individuals. Without strict and sustained oversight, it will become a powerful tool of exploitation and growing inequality. Envision a future where crypto markets, with no consumer protections, are targeted to take advantage of underserved communities and widen the inequities that already exist. Is that the future we’d like to create?

This means:

  • Stricter disclosure requirements for NFT projects and crypto companies.
  • Increased enforcement actions against those who engage in fraud and market manipulation.
  • Educational initiatives to help people understand the risks and opportunities of crypto.

The point of the CyberKongz case isn’t simply to defend one NFT project’s actions. Don’t miss this opportunity to help build the future of Web3. Together, let’s create a just and equitable system that protects our most disadvantaged communities. The clock is ticking, and the SEC must open its eyes to this before they fall asleep for good. We need to ask ourselves: are we building a truly decentralized and empowering future, or are we simply recreating the same old system of inequality in a new digital form? Yes, but what those look like is entirely up to the decisions we make today.

  • Highlighting the SEC's failures to enforce existing regulations.
  • Calling for greater transparency in the crypto market.
  • Demanding accountability from those who exploit vulnerable investors.

The CyberKongz case isn't just about one NFT project. It's about the future of Web3, about whether we create a system that is fair, equitable, and protects the most vulnerable among us. The clock is ticking, and the SEC needs to wake up before it's too late. We need to ask ourselves: are we building a truly decentralized and empowering future, or are we simply recreating the same old system of inequality in a new digital form? The answer depends on the choices we make now.