SEC Drops Investigation into Web3 Gaming Firm Immutable

The U.S. Securities and Exchange Commission (SEC) has officially closed its investigation into Ethereum-based gaming platform Immutable with no enforcement action, the company announced Tuesday.

The decision ends a five-month tussle that began when the regulator issued Immutable a Wells Notice in October 2024, which probed into potential enforcement actions over alleged securities law violations related to the company’s IMX token.

With no further legal consequences against Immutable, the IMX Ecosystem Foundation, and its CEO James Ferguson, the resolution was touted by the company as “a win for Web3 gaming” and “everyone who believes in digital ownership rights.”

The now-closed investigation focused on alleged securities violations related to IMX token sales in 2021, when Immutable raised at least $12.5 million. The SEC had also questioned representations about the token’s backing, particularly regarding a pre-launch investment from Huobi Ventures.

At the time of the Wells Notice, Immutable criticized the SEC’s approach as “overreach” and maintained that its IMX token was not a security.

All part of the pattern

The dismissal follows a broader pattern of the SEC dropping investigations against crypto companies under the Trump administration, which has established a crypto task force led by Hester Peirce and moved away from “regulation by enforcement.”

In retrospect, it’s worth mentioning that the IMX tokens in question were dumped by GameStop in 2022 to the tune of roughly $47 million at the time, following a now badly-ended deal between Immutable and GameStop in which the latter launched an NFT marketplace that made use of Immutable X’s layer-2 scaling solution to process transactions.

It remains unclear whether the ETH earned from these fees was later dissolved, where those went after, and whether those constituted an “immaterial” amount, similar to language that social media platform Reddit used to describe its crypto holdings when it filed for an IPO with the SEC in February 2024.

Earlier today, Decrypt reported that GameStop has updated its investment policy to add and allow Bitcoin as an investment instrument.

Edited by Sebastian Sinclair