Immutable Faces SEC Enforcement Action

Blockchain gaming platform Immutable announced that the U.S. Securities and Exchange Commission (SEC) may initiate an enforcement action against it for alleged securities law violations.

The SEC issued a Wells notice shortly after their initial meeting with the firm. A Wells notice serves as communication from SEC staff indicating a potential recommendation for enforcement action against a company.

Immutable noted, "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. Instead, in our very first interaction with the SEC, we were told a Wells notice would be issued to the company within the week. We then received it within hours."

The company believes the SEC's claims may pertain to the listing and private sales of IMX in 2021 but stated that the notice provided minimal details. Immutable is aware of related inquiries from the Department of Justice but mentioned no actual or proposed legal action.

An SEC spokesperson remarked, "The SEC does not comment on the existence or nonexistence of a possible investigation."

Several crypto firms, including Robinhood Crypto, Crypto.com, and OpenSea, received Wells notices over the past year. The SEC has previously taken enforcement actions against major firms like Coinbase and Kraken. SEC Chair Gary Gensler emphasized the importance of registration and following agency rules for crypto firms to protect investors.

Some industry players argue that registration is unfeasible, citing that regulations are tailored for traditional entities and not digital asset firms.

Immutable contends that IMX is not a security and is prepared to defend its position if necessary, asserting, "We are confident in our position, in the value digital ownership can bring to 3.1 billion gamers across the world, and in the power of blockchain to create a better internet. If required, we will fight for these rights, and those of our industry, vigorously."