The web3 gaming company Immutable has been issued a Wells Notice by the U.S. Securities and Exchange Commission (SEC). They reported this in a statement on Friday.

This notice arrived just hours after Immutable's initial engagement with the SEC, mentioning statutory provisions but lacking significant details about the nature of the investigation.

The company criticized the SEC’s approach as a form of “regulation by enforcement,” expressing disappointment at the lack of regulatory clarity. They specifically highlighted that this notice appears to target the listing and private sales of their IMX token that occurred back in 2021.

Following the announcement, the value of the IMX token dropped by over 13%, trading at approximately $1.16.

A Wells Notice is a communication from the SEC informing an entity of impending legal action following an investigation. Other notable companies in the crypto sector, including Coinbase and Ripple, have also received such notices.

Immutable stated they are committed to contesting the SEC's allegations, asserting that their IMX token should not be classified as a security and expressing readiness to face the regulatory challenges ahead.