Blockchain Gaming Platform Immutable Targeted by SEC, IMX Token Price Drops

The United States Securities and Exchange has targeted blockchain gaming platform Immutable potentially targeting its listing and private sales of the IMX token in 2021.

The United States Securities and Exchange Commission has targeted blockchain gaming platform Immutable with an accelerated Wells notice, potentially over the listing and private sales of the IMX token in 2021, the company said on Wednesday.

Immutable, which counts GameStop among its partners, said the SEC notice was issued hours after the agency told the company to expect a Wells notice within the week.

The notice "simply cited statutory provisions" with "fewer than 20 words of material explanation" on the investigation's focus, Immutable said in a blog post.

The company said the SEC appeared to be focused on a 2021 blog post in which Immutable said Huobi Ventures made an early investment in IMX at a pre-launch price of $0.10, issued at a "$10 pre-100:1 split," and that there was no "exchange of value" in the deal.

Immutable disputed this claim, arguing that the investment was legitimate and backed by "real consideration."

The SEC declined to comment immediately.

Immutable said it was "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."

"We're prepared to have a robust conversation to clarify facts and, if needed, challenge the SEC's enforcement approach in court," the company added.

Immutable co-founder Robbie Ferguson said the company would "defend digital ownership in gaming" by joining contemporaries like Robinhood and OpenSea in defending against the SEC's claims.

"We're prepared to do our part, join the companies fighting for crypto, and defend digital ownership in gaming," Ferguson said in a tweet.

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.