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Blockchain gaming platform Immutable has announced that it received a Wells notification from the U.S. Securities and Exchange Commission (SEC) that it may initiate an enforcement action for violations of securities laws. The company noted that the notification was sent immediately following the initial SEC meeting. A Wells notification is a formal notification that SEC staff may recommend enforcement action against a firm.
“Normally, before a Wells notification is issued, there are months of discussions between the SEC and the company’s attorneys so that the SEC can fully understand the situation,” Immutable said in a statement on Thursday. “However, in our initial interaction with the SEC, we were told that the company would receive a Wells notification within a week, and we received the notification within hours.”
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Immutable noted that the SEC believed the allegations could include a listing and private sale of the IMX token in 2021, but the notification provided little detail. The company also said, “We are aware of relevant investigations from the Department of Justice, but there are no actual or proposed legal actions at this time.”
While the SEC does not comment on potential investigations, Wells notices have been sent to several crypto firms over the past year, including Robinhood Crypto, Crypto.com, and OpenSea. The SEC has also taken enforcement actions against Coinbase, Kraken, and other major firms. SEC Chairman Gary Gensler emphasized that crypto firms must comply with the rules and register with the SEC, and that investor protections are vital. However, some in the crypto industry have argued that the rules made for traditional financial institutions do not apply to the digital asset industry, and therefore registration is not possible.
Immutable has argued that IMX is not a security and has announced that it will continue to fight on this issue if necessary. The company said, “We are confident in the value that digital property can bring to the 3.1 billion gamers in the world, and the power of blockchain to create a better internet,” and that it will fight resolutely to defend both its rights and the rights of the industry if necessary.
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