aecifo

Unwavering commitments to fight after SEC ‘spray and pray’ Wells opinion

Umito November 1, 2024

Crypto gaming platform Immutable has vowed to fight any potential enforcement action from the United States Securities and Exchange Commission after receiving a Wells Notice from the regulator.

In a November 1st statementImmutable said that while the SEC did not elaborate on its allegations in the notice, it believes the agency’s claims are aimed at the “listing and private sales” of its native IMX token in 2021.

Several companies received Wells notices this year, including OpenSea, Crypto.com and Uniswap.

The gaming platform said it had a ten-minute call with the SEC shortly after already publishing the Wells notice.

On appeal, the SEC alleged a 2021 Immutable blog post indicating a pre-launch investment made in the IMX token at a price of $0.10, which was issued at a price of “$10 before 100:1. divide» was inaccurate and implied that there had been no exchange of value between the parties.

“Once again, the SEC is wrong: there was real consideration, which it would have learned through constructive dialogue with the company,” Immutable responded.

A Well Notice is an official letter issued by the SECOND which informs an entity that the regulator is considering taking enforcement action. A Wells notice generally indicates that the SEC has completed an investigation and discovered evidence of possible violations of the securities laws.

Additionally, Immutable said it was extremely unhappy with the manner in which the regulator issued the Wells notice, saying the notice came to them with very little warning.

“Before a Wells Notice is issued, there are often several months of interviews and conversations between the company’s attorneys and the SEC, so that the SEC can fully understand the situation,” Immutable said.

“Instead, in our very first interaction with the SEC, we were told that a Wells Notice would be issued to the company within the week. We then received it within a few hours.

In response to possible enforcement action, Immutable said it was “confident in its position” and would happily retaliate.

“Although the SEC uncritically asserts that industry tokens are securities, we are confident that the IMX token is not,” Immutable wrote in its statement.

THE gaming platform added that the SEC “sprayed and prayed” its lawsuit by also sending a Wells Notice to CEO James Ferguson and the Digital World’s Foundation, the parent entity of the issuer of its native IMX token.

The price of the platform’s IMX token fell as much as 9% in an hour after the SEC actions and is currently trading at $1.20, according to TradingView data.