The U.S. Securities and Exchange Commission (SEC) has closed its investigation into Australian blockchain gaming firm Immutable, opting not to pursue enforcement action after examining its $IMX token.
The regulator had been looking into whether the company’s actions related to the $IMX token, including a 2021 fundraising round, constituted violations of U.S. securities laws. Immutable consistently denied that its token met the definition of a security and argued that the SEC’s inquiry represented an overly aggressive interpretation of existing regulations.
The decision, confirmed by Immutable on Tuesday, ends a five-month process that began in October 2024 with the issuance of a Wells Notice.
What was the Wells Notice about?
In October 2024, Immutable received a Wells Notice from the U.S. Securities and Exchange Commission (SEC), indicating that the agency was considering bringing a civil enforcement action against the company. The notice, whilst not specific in its allegations, referenced possible violations of U.S. securities laws and alleged misrepresentations related to the company’s activities.
Immutable stated that it believes the SEC’s concerns focused on the private and public sales of its $IMX token in 2021, through which the company raised at least $12.5 million. The SEC reportedly questioned whether those sales constituted the unregistered offering of securities.
The company disputed these claims, asserting that the investment was legitimate and supported by consideration. Immutable also expressed concern over the SEC’s process, stating that the Wells Notice was issued without prior dialogue or detailed explanation. This notice was also extended to the company CEO James Ferguson and to the Digital Worlds Foundation, the parent entity responsible for the $IMX token.
Why is SEC dropping its investigation?
Immutable announced on Tuesday that the SEC had concluded its investigation without taking enforcement action. Whilst the regulator has not commented publicly on its rationale, the outcome means that the agency will not bring a lawsuit or impose penalties.
The decision appears consistent with a recent shift in the SEC’s approach to cryptocurrency enforcement. Under the current U.S. administration, the agency has scaled back some of its more aggressive investigations.
A newly formed task force within the SEC, led by Commissioner Hester Peirce, has reportedly focused on alternative strategies for regulating digital assets.
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