Crypto Gaming Platform Immutable Challenges SEC Enforcement Action

 

Immutable Vows to Fight SEC Enforcement Action After Wells Notice

Immutable, a prominent crypto gaming platform, has expressed its determination to contest any potential enforcement action from the United States Securities and Exchange Commission (SEC) following the receipt of a Wells notice.

In a statement released on November 1, Immutable clarified that although the SEC did not outline its specific allegations, it believes the claims are directed towards the “listing and private sales” of its native IMX token during 2021. The gaming platform stated that it had a brief 10-minute call with the SEC shortly after the Wells notice was issued.

During this call, the SEC raised concerns about a 2021 Immutable blog post discussing a pre-launch investment in the IMX token at a price of $0.10. The SEC argued that the post was inaccurate and suggested that there was no real exchange of value between the parties involved.

Immutable responded robustly, asserting, “Once again, the SEC is incorrect: there was real consideration, which they would have learned through a constructive dialogue with the company.”

Understanding Wells Notices

A Wells notice is a formal communication from the SEC that informs an entity that the regulator is contemplating an enforcement action. This typically follows an investigation where the SEC finds potential violations of securities laws.

Immutable expressed dissatisfaction with the manner in which the Wells notice was delivered, noting that it was given very little warning. “Prior to the issuance of a Wells notice, there are often multiple months of interviews and conversations between company counsel and the SEC, so the SEC can fully understand the situation,” they stated.

Despite the looming enforcement action, Immutable remains “confident in its position” and is prepared to fight back. “Despite the SEC indiscriminately claiming that tokens across the industry are securities, we are confident the IMX token is not,” they declared in their statement.

The SEC’s actions have also affected Immutable’s market performance, with the price of the IMX token dropping by as much as 9% within an hour after the announcement, currently trading at $1.20 according to TradingView data.

Additionally, the SEC has also issued Wells notices to Immutable’s CEO James Ferguson and the Digital World’s Foundation, the parent entity of the issuer of the IMX token.