SEC Ends Investigation Into Ethereum Gaming Project CyberKongz, Marking Win for Web3 Gaming

According to Decrypt: Ethereum-based NFT and gaming project CyberKongz has confirmed that the U.S. Securities and Exchange Commission (SEC) has officially ended its multi-year investigation into the project, with no enforcement action taken. This marks yet another regulatory victory for Web3 companies under the crypto-friendlier climate of the Trump administration.SEC Closes Case Without ActionCyberKongz revealed via X (formerly Twitter) that the SEC had concluded its inquiry, which had spanned more than two years and included the issuance of a Wells notice last December—a formal letter indicating the possibility of legal action.“After years of litigation, unjust allegations, crippling legal fees, and the biggest hurdle we could possibly encounter—we are free,” CyberKongz stated in a celebratory post.An SEC spokesperson declined to comment, a consistent stance the agency has taken amid a string of recent dropped investigations, including high-profile cases involving Yuga Labs (creators of Bored Ape Yacht Club) and OpenSea, the largest NFT marketplace.Why Was CyberKongz Under Investigation?The SEC’s scrutiny reportedly centered around:The BANANA token, used within CyberKongz’s ecosystemA blockchain gaming componentThe 2021 migration of its Genesis Kongz NFT contractRegulators allegedly interpreted these elements as potential unregistered securities offerings, raising broader implications for Web3 gaming projects that integrate tokens.CyberKongz criticized the SEC’s token interpretation, calling it “very concerning rhetoric” that could pose risks to the entire Web3 gaming industry. With the case now closed, the team expressed hope that this outcome would provide greater clarity for similar projects.What’s Next for CyberKongz?Following the regulatory green light, CyberKongz is aiming to return to its creative roots, according to its pseudonymous founder and artist Myoo:“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.”CyberKongz originally launched its Genesis NFT collection on Ethereum in 2021 and has since expanded with companion projects, including a blockchain game on Ronin, a gaming-focused Ethereum sidechain. The game, Play & Kollect, migrated to Ronin in 2023 to better support scalable gameplay.NFT Market ContextWhile CyberKongz NFTs once fetched over $300,000 in sales, current floor prices have dropped significantly. According to NFT Price Floor, the Genesis CyberKongz collection now starts at approximately $5,447 (in ETH equivalent).Despite lower valuations across the NFT sector, this regulatory win positions CyberKongz to rebuild momentum and potentially attract renewed investor confidence in the evolving Web3 gaming space.