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The SEC has issued a Wells notice to blockchain gaming platform Immutable, adding to the growing list of crypto companies facing scrutiny before the upcoming U.S. election.
Immutable said that the SEC is engaged in ‘regulation by enforcement’, again, attacking the crypto space. The notice descriptor states that there were no discussions first from that authority before the issuance of the notice.
Nonetheless, Immutable maintains that the allegations brought against them are generally vague, as they focus the majority of their attention to the listing and private sales of the IMX token in 2021. The platform argues that IMX is not and should not be considered as a security, and emphasizes that the actions of the regulator have cut out any chances of fruitful engagements.
Immutable’s Statement Centers on Potential Securities Law Violations
Immutable stressed that the information in the SEC Wells notice was general, stating only that there might have been issues regarding securities laws with respect to IMX tokens listing and private sales carried out in 2021. The company expressed dissatisfaction with such scant content which averaged nearly 20 words and also observed that there was no particular reason for the inquiry.
Immutable avers that the SEC misrepresented facts it did not state, including in its blog advertising token purchases in IMX’s pre-sale as investment opportunities, was not a lie because in 2021, there was a post about the price of the token before its launch. The company argued that the regulator took this out of context and that there was an investment where there was genuine consideration. With a little bit of open space, Immutable is confident the SEC would have been able to resolve that quite easily.
This is the reason why Immutable reiterated that it is ready to ‘defend the rights of builders, creators and gamers’ with the firm’s strong bases behind them. The company stated its commitment to the sector and that it will ‘keep building’ irrespective of the regulatory primary barriers.
Blockchain Association slams Gensler’s SEC Enforcement Actions
According to one of the crypto advocacy groups, the Blockchain Association, member companies have incurred over $400 million in spending to comply with enforcement actions taken by Gary Genser’s Chair of the SEC in the US.
The association made this claim in a statement made on October 31. They noted that there are currently 104 Gensler’s SEC enforcement actions active on crypto companies which forced market players to spend around 426 million to defend cases.
They further said that these costs were self-reported by the members and represent only a fraction of the total costs incurred in the industry. The association’s members include sizable companies like Ripple, Coinbase, Grayscale, Crypto.com, Paradigm and Kraken many of whom are in some legal tussle with the SEC.
This Calls for Regulatory Clarity
The HarrisX Institute conducted a poll between October 25 and 28 in which 1717 registered voters participated. The results showed that many voters feel the U.S.’s approach toward crypto regulation is not ideal. Most of the people – about two for everyone – preferred guidance over being reactionary.
The survey also uncovered the fact that two-thirds of voters tend to agree with the SEC’s stance, which is to hold off any further actions until Congress lays down some clear text for any future protection to the industry.
Given the context with the SEC’s Wells notice sent to Immutable, the crypto companies are fully prepared to face heightened standards and scrutiny before the proceeds of the U.S. election. Immutable in its post made on October 31 stated the ‘wide net’ that the SEC has been employing to catch any ‘suspicious’ crypto company is hopeless. The ongoing regulatory pressure highlights the rising tension between the SEC and the crypto industry.
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