EthereumgamingstartupImmutablehasreceivedaWellsnoticefromtheUSSecuritiesandExchangeCommission(SEC).ImmutablecomplainedtheSECwasdeliberatelyroughtocryptostartups,despitelittleevidenceofharm.
Immutable(IMX)wasoneofthetopgaming-orientedprojectsduringthe2021play-to-earnboom.TheprojectcombinedanNFTmarketplaceandanL2scalingsolutionforthird-partygamedevelopers.
ThelaunchofImmutablehappenedduringanoptimisticperiodinthecryptomarket.Theprojectmanagedtoraise$320Minapresale,ofwhichmorethan14%ofIMXtokenswenttothepublic.ThiswasthepointofcontentionthattheSECtargeted,accusingImmutableofplacinganunregisteredsecurity.
TheUSSECcontactedImmutableforaconversationandimmediatelyissuedtheWellsnotice.Immutablenowfacesactionaftergettingachanceforapublicresponse.ThenoticemayprecedealawsuitbutdoesnotguaranteethenextactionsoftheSEC.
ImmutablehasreceivedaWellsnoticefromtheSEC,thelatestintheirdefactopolicyofregulationbyenforcement.Wereceivedthiswithinhoursofourfirsteverconversation,onatimelineclearlyacceleratedtolandbeforeanelection.
Sadly,storieslikethisarebecoming…
—Immutable(@Immutable)October31,2024
FollowingthenewsoftheWellsnotice,IMXtokensslidfrom$1.37to$1.22,fallingtoaone-monthlow.However,theSECinvestigationalsotriggeredarenewalinopeninterest.ForIMX,openinterestralliedfromlowsof$22Mupto$27Mwithinafewhours.IMXisseenasariskyproposition,thoughalsoasanopportunitytoquicklyrecoverfromitslows.
IMXisrepresentedonmostmajorexchanges,includingBinanceandCoinbase.Sofar,Wellsnoticeshavenotledtodelistingsforotherprojects,withtheexceptionofXRP,whichwasdelistedfromBinanceforayear.
ImmutableclaimstheSECisusingaggressiveenforcement
ImmutablehasencounteredtheSEC’sapproachoftargetinghigh-profileon-chainprojectswithadirectattempttolevyfinesorcauseprotracted,expensivelawsuits.TheSEChastargetedindustryleaderslikeCoinbase,Crypto.com,andUniswap.
OtherprojectsaffectedbySEC’sapproachofdirectactionincludeConsensys,Ripple,andOpenSea.
TheWellsnoticessuggesttheSEChasdiscoveredinfarctionsintheproject’sactivities,withthepossibilityoflaunchingalawsuit.ImmutablenotedthattheSECdidnotgivematerialexplanationsonitsfindingsorwhichaspectoftheproject’sbusinesstriggeredtheinvestigation.TheteamsuggestedtheSECmaybeonageneralwaragainstcryptoprojects,evenwithoutspecificregulatoryfindings.
Immutabletargetedbasedonsecuritieslaw
TheSEChastargetedImmutablebasedonsecuritieslaw,mostprobablybecauseofitsprivateandpublicplacementin2022,followedbyexchangelistings.AccordingtoImmutable,theSEC’sallegationsofsellingunregisteredsecuritiesarevague.
Despitethis,thecaseofRipplehasshownthattheSECcankeepupthefightforyears,preventingprojectsfrominnovatingandtappingliquidity.
Immutablestateditisreadytobecompliant,butisagainstaggressiveenforcementwithnoclearmeanstoamendthebusinessmodel.Instead,theSEChaslaunchedexpensiveandprotractedlawsuitsagainstmultipleprojects.TheSEChasevenlostsomeofthelawsuits,thoughnotwithoutcausingdelaysfortheprojects.
Immutablebecameastapleinthegamingspace,drawingingameslikeGodsUnchained,Etherbots,andGuildofGuardians.TheplatformitselfworkedasanL2,aimingforwideadoption.Theprojectiswell-fundedandcancontinuetoinnovateasinterestinWeb3projectsreturns.
IMXtokenscanalsobestaked,inexchangeforrewardscomingfromtheecosystemdevelopmentfund.IMXtokensare78%unlocked,gettingclosertotheirfairvalue.TheplatformdoesnotcarryaDeFispaceandonlylocksaround$24.51Minliquidity.
TheL2solutiondoesnotbehavelikeotherchainsaimingtotapEthereumliquidity.Instead,Immutableaimstogiveafast,scalablenetworkforgaming.Immutableisalsoworkingonazero-knowledgesolutionandhasachievedpartialdecentralization.AccordingtoL2Beat,Immutablehasachievedthreeofthefivemilestonesforzero-knowledgechains.
Immutablecarriesdozensofgamesandapps,thoughsomeofthemhavelimitedon-chainactivity.GodsUnchainedremainsthetopapp,mixingNFTandcompetition.ImmutablealsocarriesIlluvium(ILV),oneofthehigh-profile3Dgames.Thenoticearrivesatatimewhenon-chaingamingattemptstomakeareturn,thistimeinamoresustainablewaycomparedto2021.
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