Immutable Vows To Contest SEC Enforcement Action Over IMX Token

According to Cointelegraph, crypto gaming platform Immutable has announced its intention to challenge any potential enforcement action from the United States Securities and Exchange Commission (SEC) after receiving a Wells notice from the regulator. In a statement released on November 1, Immutable indicated that while the SEC did not specify its allegations, the company believes the claims are related to the 'listing and private sales' of its native IMX token in 2021. The gaming platform revealed that it had a brief ten-minute call with the SEC shortly after receiving the Wells notice. During the call, the SEC referenced a 2021 Immutable blog post that mentioned a pre-launch investment in the IMX token at a price of $0.10, which was issued at a '$10 pre-100:1 split.' The SEC alleged that this post was inaccurate and implied there was no exchange of value between the parties. Immutable responded by stating that the SEC's claims were incorrect and that there was real consideration involved, which could have been clarified through constructive dialogue. A Wells notice is a formal letter from the SEC informing an entity that the regulator is considering an enforcement action. It typically indicates that the SEC has completed an investigation and found evidence of potential securities law violations. Immutable expressed dissatisfaction with the manner in which the Wells notice was issued, noting that it was delivered with very little warning and without the usual months of interviews and conversations that typically precede such notices. Immutable stated that it is confident in its position and prepared to contest the SEC's claims. The company argued that despite the SEC's broad assertion that tokens across the industry are securities, it believes the IMX token does not fall under this category. Immutable also criticized the SEC's approach, describing it as a 'spray-and-pray' tactic, as the regulator also issued Wells notices to CEO James Ferguson and the Digital World's Foundation, the parent entity of the IMX token issuer. Following the SEC's actions, the price of Immutable's IMX token dropped significantly, falling by as much as 9% in one hour and currently trading at $1.20, according to TradingView data.