• Immutable received a Wells Notice from the SEC, potentially due to the private sale of its token in 2021.
  • The company stated that the Notice was sent just hours after its first interview with regulators. 
  • IMX has seen double-digit losses, declining over 13% following the announcement.

IMX declined over 13% on Friday following Immutable's announcement that it received a Wells Notice from the Securities & Exchange Commission (SEC), presumably due to the private sale of its tokens in 2021.

IMX declines as SEC serves Immutable Wells Notice

Immutable, the company behind Layer-2 gaming blockchain Immutable X, announced in a blog post on Thursday that it received a Wells Notice from the SEC, likely due to its private sales of IMX tokens in 2021. This makes it the latest among a long list of crypto companies targeted by the SEC.

A Wells Notice is a document indicating that the SEC has completed investigating a company and intends to take enforcement action. It also allows the recipient to respond to the regulator's claims before an enforcement action is taken.

The company stated that it received the Notice only hours after having its first meeting with the regulator, which was quicker than expected.

"In our very first interaction with the SEC, we were told a Wells Notice would be issued to the company within the week. We then received it within hours," Immutable wrote in a blog post.

The urgency with which the Notice was issued raised questions concerning the SEC's regulatory methods. Additionally, the company accused the SEC of only citing the statutory provisions without detailing the nature of its investigation.

Other notable crypto community members also shared their thoughts on the issue.

"Wells Notices are supposed to be part of a neutral and fair process giving investigation targets a chance to explain why the SEC shouldn't enforce against them. There is no justification for sending Wells Notices like this," said Variant Chief Legal Officer Jake Chervinsky in a post on social media platform X.

The SEC has issued Wells Notices to several key crypto firms in the past few months, including Consensys, Uniswap and OpenSea. As a result, many regard the current administration's crackdown on crypto companies as a "regulation by enforcement" approach.

The crypto community is also hopeful of a better regulatory environment for the industry after the presidential election, which is only four days away.

IMX/USDT daily chart

IMX/USDT daily chart

IMX saw harsh declines following the announcement, diving 13% in the past 24 hours. The L2 token could see heavy declines if it sustains a daily candlestick close below the support level at $1.041.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high

Bitcoin and Ethereum are approaching their key support levels, and a sustained close below these marks could lead to further declines. 

More Cryptocurrencies News
TON set to launch synthetic Bitcoin to boost its DeFi solutions

TON set to launch synthetic Bitcoin to boost its DeFi solutions

TON revealed its plan on Thursday to launch a synthetic Bitcoin token on its blockchain, allowing users to trade, stake, and earn yield using BTC. Following the announcement, TON is down over 3%.

More Ton News
Maker Price Forecast: MKR could stage 40% rally

Maker Price Forecast: MKR could stage 40% rally

MakerDAO is up 2% on Thursday and could be set for a 40% rise in the coming weeks if it successfully maintains an extended move above the descending trendline of a falling wedge. On-chain data also supports the bullish outlook after a four-month-long decline.

More MakerDAO News
USDT market cap crosses $120 billion as stablecoins continue their uptrend

USDT market cap crosses $120 billion as stablecoins continue their uptrend

The stablecoin market cap continued its uptrend in October, characterized by USDT reaching a $120 billion market cap, according to a CCData report on Thursday. This indicates that investors are preparing liquidity to fuel more demand.

More USDT News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP