SEC crackdown continues with Immutable latest to receive Wells Notice

Immutable challenged the SEC's vague allegations and said it will continue to innovate despite regulatory hurdles

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

The SEC has issued a Wells notice to blockchain gaming platform Immutable in what has become a widespread crackdown on crypto companies ahead of the US election.

Immutable said in an Oct. 31 blog post that the move is the latest instance of the SEC’s “regulation-by-enforcement” policy targeting the crypto industry. It added that the watchdog issued the notice without prior discussions

According to Immutable, the SEC’s allegations, though vague, appear to focus on the 2021 listing and private sales of its native token IMX. The network contends that the IMX token does not meet the criteria of a security and that the regulator’s actions bypass meaningful dialogue.

Immutable said:

“To manufacture a case on a listing that occurred in 2021, with practically no direct communication with the company, is precisely the reason the industry is so skeptical of any attempts from this SEC to argue it is attempting to provide clarity.”

Immutable’s statement indicated that the SEC’s allegations, though non-specific in the Wells notice, seem to center on potential securities law violations related to the listing and private sales of its IMX token in 2021.

The company expressed frustration that the SEC’s notice contained only limited detail — fewer than 20 words of substantive explanation — and lacked a clear basis for the investigation.

Additionally, Immutable suggested that the SEC’s allegations implied inaccurate claims of “fraudulent misrepresentations” tied to a 2021 blog post about the IMX token’s pre-launch investment pricing.

The company argued that the regulator mischaracterized this information, stating that there was indeed “real consideration” involved in the investment, which the agency could have clarified had it engaged in constructive dialogue with Immutable before issuing the notice.

Immutable said it is prepared to “defend the rights of builders, creators, and gamers,” with its considerable war chest and extensive resources. It added that its commitment to the industry is clear and it will “keep building” regardless of the regulatory challenges.