SEC Issues Wells Notice to Immutable for 2021 IMX Token Sales

The United States Securities and Exchange Commission (SEC) has set its sights on the blockchain gaming platform Immutable, focusing on its IMX token’s listing and private sales that took place in 2021.

In a statement released on November 1, Immutable revealed that the SEC issued an “accelerated” Wells notice. This followed an earlier communication where the SEC indicated that a Wells notice would arrive “within the week,” but it was delivered much sooner—within mere hours.

Immutable pointed out the ambiguous nature of the notice, which merely referenced statutory provisions and contained “fewer than 20 words of material explanation,” lacking significant detail regarding the investigation’s specific focus. The company suspects that the SEC’s inquiries are directed at the “listing and private sales” of its IMX token during 2021.

Shortly after issuing the notice, the SEC reportedly conducted a phone call with Immutable, expressing concerns about a 2021 blog post in which the company discussed Huobi Ventures’ early investment in IMX, priced at a pre-launch rate of $0.10 based on a “$10 pre-100:1 split.” The SEC claimed that this transaction involved no “exchange of value.”

Immutable refuted this assertion, insisting that the investment was genuine and supported by “real consideration.” The firm expressed confidence in its stance regarding the IMX token’s classification, countering the SEC’s broad claims that many tokens in the industry qualify as securities.

Immutable has called for an open dialogue to clarify the facts and has voiced its readiness to contest the SEC’s enforcement tactics if necessary.

In response to these developments, Immutable co-founder Robbie Ferguson reiterated the company’s commitment to “defending digital ownership in gaming,” aligning with other industry leaders like Robinhood and OpenSea in contesting the SEC’s allegations.

While a Wells notice does not automatically lead to formal action, this situation has negatively impacted Immutable’s IMX token, which saw a decline of over 14% at the time of reporting.

Under the leadership of Chair Gary Gensler, the SEC has aggressively pursued cryptocurrency firms for purported violations of securities laws. This approach has prompted backlash from U.S. lawmakers, who argue that Gensler is fostering confusion within the digital asset sector by introducing concepts like “crypto asset security.”

Nonetheless, the SEC remains resolute, having recently issued a Wells notice to Crypto.com, which has since responded by filing a lawsuit against the commission.

Read more: Neiro, Immutable X, Arkham sees gains as Bitcoin faces stagnation.

Leave a Reply

Your email address will not be published. Required fields are marked *