The United States Securities and Exchange Commission (SEC) has set its sights on the blockchain gaming platform Immutable, potentially scrutinizing its listing and private sales related to the IMX token that occurred in 2021.
In a statement released on November 1, Immutable revealed that the SEC had issued an “accelerated” Wells notice, following an initial communication in which the SEC indicated that a notice would be sent “within the week.” However, the agency delivered the notice in a matter of hours instead.
Immutable criticized the ambiguity of the notice, pointing out that it merely referenced statutory provisions and included fewer than 20 words of substantive explanation, providing little insight into the specific focus of the investigation. The company speculates that the agency’s concerns may be aimed at the “listing and private sales” of its native IMX token in 2021.
Shortly after the notice was issued, the SEC reportedly conducted a phone call with Immutable, expressing concerns regarding a 2021 blog post in which the company outlined Huobi Ventures’ initial investment in IMX at a pre-launch price of $0.10, referencing a “$10 pre-100:1 split.” The SEC claimed that there had been no “exchange of value” in this transaction.
Immutable contests this assertion, maintaining that the investment was legitimate and based on “real consideration.” The company expressed confidence in its stance on the IMX token’s classification, countering what it sees as the SEC’s tendency to broadly categorize various tokens within the industry as securities.
In light of these developments, Immutable called for a “robust conversation to clarify facts” and expressed its readiness to contest the SEC’s enforcement methods if needed.
Reacting to the situation, Immutable co-founder Robbie Ferguson reaffirmed the company’s commitment to “defend digital ownership in gaming,” aligning with industry peers like Robinhood and OpenSea in opposing the SEC’s claims.
Although a Wells notice does not necessarily lead to formal action, it still represents a significant challenge for Immutable, as the value of the IMX token fell by over 14% at the time of reporting.
Under the leadership of Chair Gary Gensler, the SEC has been actively pursuing crypto firms for allegedly violating securities laws. This aggressive approach has drawn criticism from U.S. lawmakers, who contend that Gensler’s introduction of terms like “crypto asset security” is contributing to confusion within the digital asset landscape.
Despite the pushback, the SEC remains resolute, having recently issued a Wells notice to Crypto.com, which in turn has filed a lawsuit against the commission in response.
For more updates, see: Neiro, Immutable X, Arkham pumps as Bitcoin stalls.