The SEC has handed down a Wells notice to Immutable, one of the top blockchain gaming companies. This notice, shared on Immutable’s blog post on October 31, is a pivotal moment in what many consider the SEC’s growing assault against the crypto industry on the eve of the U.S. presidential election.
The SEC’s approach, the firm’s statement points out, fits the pattern of the ‘regulation by enforcement’ tactic, which has left countless blockchain companies under legal and financial uncertainty. Immutable criticized in its post the SEC’s lack of prior consultation on the issuance of the notice and its aggressive and opaque approach to regulating an industry it has largely ignored.
Immutable Claims SEC Focused on Initial IMX Token Sales
Regardless, the US Securities and Exchange Commission has not given any further details, Immutable claims the agency is concerned with the initial listing and private sales of its own IMX token, the native currency of its gaming ecosystem, in 2021. The Wells notice also seems to ask whether these sales may have violated securities laws. Immutable argues that IMX is not a security on the basis that it is immutable. 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.”
The SEC’s move is consistent with the agency’s recent scrutiny of blockchain companies and digital assets, particularly venture funds raising token sales that may constitute unregistered securities offerings. The agency is targeting well-known crypto firms like Immutable in an effort to establish a precedent around how tokens should be classified and sold within the United States.
The Wells notice is ‘immensely disappointing’ she said, ‘offered fewer than 20 words of substantive detail, and overall was simply incomprehensible.’ The company said that it struggles to respond properly to accusations, or engage in constructive dialogue, because it lacks specific accusations.
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Immutable Criticizes SEC for Bypassing Collaborative Regulatory Approach
In a statement, the company also sounded the alarm over ‘inaccurate claims’ about how it treated sales of its IMX token in 2021. In the SEC’s allegations, they refer to these fraudulent misrepresentations in the blog post Unicorn published at that time describing the token’s pre-launch pricing structure. Immutable says investors were informed transparently and the terms of the investment were reviewed in detail.
Both Immutable and all builders, creators, and gamers of blockchain technology believe in their potential and will continue to stand up for their crypto community, the company’s statement said, adding that:
“This is not just a fight against Immutable, but a fight against all builders, creators, and gamers that believe in the potential of blockchain technology.”
The US Securities and Exchange Commission had, in Immutable’s eyes, chosen to bypass collaboration on a path that would hopefully have reached an outcome without resorting to punitive, which they said there was no need for. Immutable is fighting the SEC’s claims, it assured and is determined to do so. The company has a ‘big war chest’, as well as robust resources, to protect its interests and the larger interests of blockchain gaming, it said.
But even as regulators have attempted to hobble the largest crypto exchange in the world by declaring it an illegal entity, its leadership has stuck by the firm’s commitment to continuing its mission. The focus on regulatory scrutiny hasn’t slowed Immutable down either as it reaffirmed its intention to ‘keep pushing’ to innovate within blockchain gaming.
Conclusion
The SEC’s actions may have forced other blockchain gaming companies to give up on the sector, but Immutable is moving forward and is as committed as ever to blockchain gaming and innovation. Having plenty of resources at its disposal, the company vows to protect its community by being resilient and remaining dedicated to the advancement of the blockchain gaming space amidst regulatory barriers.
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