United States Securities and Exchange has targeted blockchain gaming platform Immutable potentially targeting its listing and private sales of the IMX token in 2021.
According to a Nov. 1 statement from Immutable, the SEC issued an “accelerated” Wells notice following an initial interaction where the SEC informed the company that a Wells notice would be sent “within the week,” but delivered it “within hours” instead.
Immutable highlighted the vague nature of the notice, stating that it “simply cited statutory provisions” with “fewer than 20 words of material explanation” and offered little meaningful detail about the investigation’s focus. The company believes the agency’s claims could be targeting the “listing and private sales” of its native IMX token in 2021.
Shortly after issuing the notice, the SEC reportedly engaged in a phone call with the firm, raising concerns over a 2021 blog post in which Immutable detailed Huobi Ventures’ early investment in IMX at a pre-launch price of $0.10 issued at a “$10 pre-100:1 split”, stating that there had been no “exchange of value” in the deal.
Immutable disputes this claim, arguing that the investment was, in fact, legitimate and backed by “real consideration.”
The firm added it is “confident in its position” regarding the classification of the IMX token, pushing back against what it described as the SEC “indiscriminately claiming that tokens across the industry are securities.”
Immutable called for a “robust conversation to clarify facts” and expressed its willingness to challenge the SEC’s enforcement approach if necessary.
Reacting to the news, Immutable co-founder Robbie Ferguson reiterated the company’s position to “defend digital ownership in gaming” by joining contemporaries like Robinhood and OpenSea in defending against the SEC’s claims.
— Robbie Ferguson 🅧 | Immutable (@0xferg) October 31, 2024Immutable has received a Wells notice from the SEC, the latest in their approach of regulation by enforcement.
We’re ready to do our part, join the companies fighting for crypto, and defend digital ownership in gaming.
Read our full post: https://t.co/uIiLlboJ2N https://t.co/589IfARu7x
While a Wells notice does not guarantee that formal action will be taken, the development came as a blow to Immutable’s IMX token which was down more than 14% at press time.
The SEC, led by Chair Gary Gensler, has consistently gone after crypto firms for allegedly skirting securities laws. This has also sparked pushback from U.S. policymakers, who say Gensler is creating confusion in the digital asset space by introducing terms like “crypto asset security.”
Yet the regulator remains unfazed, recently issuing a Wells notice to Crypto.com. In response, Crypto.com filed a lawsuit challenging the commission.