The price of Immutable’s IMX token on Ethereum fell rapidly late Thursday after the crypto gaming firm disclosed that it received a letter from the U.S. Securities and Exchange Commission (SEC) threatening potential enforcement action ahead.

IMX is down 14% on the day at a current price of $1.15, per data from CoinGecko, including a sudden dip from a price of about $1.29 to $1.19 in less than two hours after Immutable disclosed the Wells notice late Thursday afternoon.

Immutable said that it had received the letter from the SEC warning of an impending lawsuit by the regulator, which the Australian firm believes is tied to a 2021 sale of IMX tokens that the agency alleges was a sale of unregistered securities.

“Despite the SEC indiscriminately claiming that tokens across the industry are securities, we are confident the IMX token is not,” an Immutable spokesperson said Thursday. “The notice simply cited statutory provisions and contained limited meaningful detail.”

The SEC declined to confirm details when reached by Decrypt on Thursday, saying it “does not comment on the existence or nonexistence of a possible investigation.”

The Immutable gaming platform spans two Ethereum scaling networks—Immutable X and Immutable zkEVM—which collectively play host to hundreds of game projects at some stage of development. Immutable itself has developed titles such as Gods Unchained and Guild of Guardians, and other notable games on the platform include Illuvium, Ember Sword, and Cross the Ages.

Immutable described the SEC’s action as an “overreach,” echoing comments by other firms that have been targeted by the U.S. regulator, including Coinbase, OpenSea, Crypto.com, and Uniswap Labs.

The IMX token was flying high this spring amid wider momentum around crypto gaming projects and their tokens, hitting a price of about $3.64—the highest price seen since January 2022. But IMX is now down 68% since then, echoing steep declines seen by other top crypto gaming tokens, and remains down 88% since its 2021 all-time high price of $9.52.