Blockchain-based gaming company Immutable announced in a post on X on Thursday that it had received a Wells Notice from the U.S. Securities and Exchange Commission (SEC).
This notice indicates that the SEC has completed an investigation and believes Immutable may have violated securities laws. However, with the potential for a change in SEC leadership following the upcoming presidential election, the fate of this investigation remains uncertain.
The SEC’s current chairman, Gary Gensler, could be replaced if a new presidential administration takes office on January 20. That change could significantly impact ongoing investigations, including Immutable’s. “Ongoing investigations at the SEC could be significantly impacted by a change in leadership,” said Austin Campbell, CEO of the Worldwide Stablecoin Payment Network (WSPN). Campbell suggested that investigations could be reprioritized, modified, or even abandoned under new leadership.
Republican candidate Donald Trump has vowed to fire Gensler on his first day in office, but the legal feasibility of such an action is unclear. Meanwhile, sources close to Vice President Kamala Harris’ campaign said Harris’ transition team is also evaluating potential replacements for Gensler.
Immutable expressed disappointment in the timing and nature of the Wells Notice, noting that it was issued just hours after the company was first contacted by the SEC. This left little time for response or cooperation, as companies are typically contacted by the SEC months before such notices are issued. The Notice reportedly contained only 20 words identifying areas of potential securities violations, causing Immutable to question which assets were under scrutiny.
Gensler’s tenure has been marked by what critics in the cryptocurrency industry have described as “regulation by enforcement,” focusing on punitive actions rather than proactive rulemaking. Immutable’s statement cited a lack of constructive engagement from parts of the SEC: “We welcome regulatory clarity, but it appears that some elements of the SEC are unwilling to engage in constructive dialogue,” the company said.
*This is not investment advice.