Nikolas Sargeant
The Securities and Exchange Commission (SEC) is contemplating enforcement action against blockchain gaming company Immutable over potential securities law violations.
Immutable revealed Thursday that it received a Wells notice from the regulator, targeting its 2021 IMX token offering and sales. The company strongly contests the SEC's position, stating, "We are confident the IMX token is not a security, despite the SEC's blanket approach to classifying tokens."
Unusual Speed and Brevity of SEC Notice Raises Concerns
In a departure from standard procedure, Immutable reports receiving the Wells notice immediately following their first SEC meeting. Typically, such notices emerge only after extensive discussions between company counsel and regulators. According to Immutable, the notice contained minimal explanation—fewer than 20 words of substance.
Crypto Industry Faces Mounting Legal Costs Amid Regulatory Pressure
The action against Immutable adds to a growing list of crypto enforcement cases. The Blockchain Association reports 104 SEC enforcement actions through 2023, with member companies spending approximately $426 million on legal defense.
This regulatory pressure has sparked industry pushback, with Crypto.com recently filing suit against the SEC following its own Wells notice, challenging the regulator's authority.
Immutable emphasized that while the industry seeks clear compliance guidelines, companies are instead forced to allocate millions to litigation just to maintain operations.
