The US SEC has sent a Wells notice to Immutable, indicating that the blockchain network will soon witness enforcement action.
Gaming blockchain network Immutable has pledged to fight the US Securities and Exchange Commission (SEC) if it plans to bring regulatory enforcement action against it. The regulator has issued a Wells notice to the blockchain, which is issued to companies before the SEC goes after them in court.
Immutable shared details about the ordeal it is undergoing with the regulator in a blog post, stating that the SEC did not mention why it was going after it. However, it is guessing the scrutiny is coming because of a 2021 blog post that mentioned the listing and private sale of its native IMX tokens. That post spoke about how Immutable partnered with Huobi Ventures to sell IMX tokens through a private sale.
Immutable Calls SEC Out for Not Doing Enough Due Diligence
The gaming platform also called the SEC out for hitting it with the Wells notice without warning. Often, the SEC engages with companies to understand their processes and operations through multiple months of interviews—a standard procedure followed to know if these companies are violating securities laws.
The agency did not do any of that with Immutable. It contacted the company to say they would receive the Wells notice within a week and sent it hours after the intimation. Immutable claims the SEC would have known that it did not violate laws if the regulator had engaged in dialogue with it rather than blindly bringing an enforcement action.
“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 blog read. “Despite the SEC indiscriminately claiming that tokens across the industry are securities, we are confident the IMX token is not.”
Immutable also mentioned their hunch about why the SEC was going after them was true. Both parties conversed over a call after the agency issued the Wells notice, during which it claimed the information in the 2021 blog post was incorrect. However, Immutable reiterated that the SEC would have known it was correct if they clarified it with the company.
“SEC overreach and political calendars won’t stop us; they won’t stop the industry; they won’t stop the inevitability of digital property rights,” Immutable’s blog about the Wells notice concluded.
