The U.S. SEC just issued a Wells Notice to Immutable, a firm known for its Web3 gaming initiatives.
Following this announcement, the price of Immutable’s IMX token dropped over 13%, now sitting at $1.16.
What’s the deal with the Wells Notice?
Immutable revealed on Friday that it received the Wells Notice just hours after its first interaction with the SEC.
The notice cited various statutory provisions but didn’t provide much detail about what exactly the investigation entails.
“With this action, the SEC is continuing to indiscriminately assert that tokens are securities.”
The notice didn’t specify, they believe the SEC is focusing on their IMX token’s listing and private sales back in 2021.
This includes a pre-launch private purchase of IMX by Huobi Ventures Blockchain Fund, which they referenced in a blog post.
A history of Wells Notices
For those unfamiliar with what a Wells Notice is, it’s essentially a heads-up from the SEC that they’re planning to sue.
It’s like getting a warning before the principal calls your parents! Several notable crypto companies have received these notices in recent years, including Coinbase, Ripple, and Crypto.com.
In this case, both Immutable’s CEO and the Digital Worlds Foundation—parent company of Immutable—also received separate notices.
Immutable mentioned they’re aware of related inquiries but noted there hasn’t been any actual or proposed legal action from the Department of Justice.
Industry skepticism
Immutable didn’t hold back in its statement, and in the social media, users already asked the simple but telling question, as ’who the f*ck the SEC thinks they are’.
“To manufacture a case on a listing that occurred in 2021, with practically no direct communication with the company, is precisely why the industry is so skeptical of this SEC’s attempts to provide clarity.”
They argue that despite the SEC’s claims that many tokens are securities, they firmly believe their IMX token doesn’t fall into that category.
The company concluded by expressing its willingness to fight back against what they see as regulatory overreach, and told that if winning against this attempted regulation by enforcement is how to achieve clarity for the industry, then Immutable is ready to take that challenge.
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