TL;DR
- The IMX token from Immutable drops 12.88% following a possible SEC enforcement action over alleged unregistered securities sales.
- The firm received a Wells Notice warning of a potential lawsuit related to an IMX token sale in 2021.
- The company argues that IMX is not a security and criticizes the SEC’s lack of clarity in its allegations.
The price of Immutable’s IMX token, a key player in the Ethereum-based blockchain gaming industry, saw a sharp drop following the company’s announcement of potential legal action by the U.S. Securities and Exchange Commission (SEC).
The company reported on Thursday that it had received a Wells Notice, a warning that anticipates an enforcement action from the regulator. According to Immutable, the case seems linked to a 2021 sale of IMX tokens, which the SEC categorizes as an unregistered securities offering. This announcement caused an immediate 12.88% decrease in the token’s price, dropping it to $1.16.
The platform is under pressure from the regulator, which once again demonstrates its ineffectiveness. Projects, users, and investors are left dealing with the repercussions of an administration that appears unable to establish clear regulations for an industry it is far from fully understanding.
The SEC’s Weak Argument
Immutable, founded in Australia, has defended the legality of its operations with IMX and responded firmly. As is increasingly common, the SEC is acting in an overreaching manner. The company stated that the SEC’s letter contained few specific details, merely citing general legal provisions, leaving the company with little clarity about the exact accusations it faces. According to a company spokesperson, they are confident that IMX is not a security and that the regulator has made excessive generalizations in broadly categorizing tokens as securities.
Various companies in the crypto industry are under pressure from U.S. regulators. Immutable joins a growing group of firms such as Coinbase, OpenSea, Crypto.com, and Uniswap Labs, which have recently faced regulatory actions and criticized what they see as the SEC’s unjustified approach to the sector.
Immutable (IMX) is 88% Below Its ATH
The company’s ecosystem on Ethereum encompasses scaling networks like Immutable X and zkEVM, which host numerous blockchain gaming projects at various stages of development. In addition to titles created by Immutable itself, such as Gods Unchained and Guild of Guardians, it also includes community-popular games like Illuvium, Ember Sword, and Cross the Ages.
This regulatory situation adds uncertainty to a sector that has faced significant price fluctuations. Since its peak in March 2024, when it reached $3.64, the IMX token has lost 68% of its value and remains 88% below its all-time high of $9.52, reached in January 2022