- ImmutableX is reportedly selling its IMX tokens to private investors through the Digital Worlds Foundation, a non-profit organization based in the Cayman Islands.
- The sale of the tokens by the Digital Worlds Foundation has raised questions about the transparency of the company’s operations and finances, despite raising almost $280 million from investors.
- Immutable has experienced recent lay-offs, with the company citing a need to maximize its cash reserves and put resources towards the most important projects.
Immutable, the Australian blockchain startup which has built a reputation for creating NFT-based games has reportedly been engaging private investors to buy the company’s ImmutableX (IMX) tokens. According to reports, tokens are being sold through a Caymans-based entity with ties to one of its founders, James Ferguson.
Immutable is valued at $3.5 billion, having received funding of nearly $280 million from leading investors like Tencent and Alameda Research. Additionally, the company has claimed to have a $1BN+ war chest for grants.
Recent Layoffs and Financial Status
The news of the private token sale comes less than two weeks after Immutable announced a layoff of 11% of its staff, citing low cash reserves as the reason for the move. In a note to the employees, the company stated that the layoff was necessary to maximize the longevity of the company’s cash reserves and allocate resources to the most critical projects. Immutable’s latest accounts reveal the company had $27 million in revenue and $83 million in expenses, including $45 million for employees, consultants, and freelancers.
Immutable is not alone in cutting staff, with many Australian startups suffering the same fate as investors becoming wary of making big bets on nascent companies. The crypto industry has been battered over the last year, with investors concerned about rising interest rates turning away from speculative investments after a series of unrelated high-profile collapses.
Despite the recent layoff, Immutable’s vision remains unchanged, with the company aiming to dominate Web3 gaming, an online gaming system that uses virtual assets such as cryptocurrencies and non-fungible tokens (NFTs). Immutable has built two NFT-based games and has signed deals with major companies like TikTok and GameStop to develop NFT marketplaces.
Immutable’s token sale highlights the company’s ongoing efforts to raise capital and expand its presence in the market, even as the industry struggles with market volatility and investor caution. The sale is reportedly led by a prominent venture capitalist and has already been more than two times oversubscribed in the first 72 hours. Immutable is expected to use the proceeds from the sale to fund its upcoming projects.
Potential Concerns over Transparency and Legality
The move by Immutable is not unusual in the crypto ecosystem, with many companies selling their tokens to raise capital. Token sales are a popular route for companies to allow investors to get involved in their startups. However, legal uncertainty exists about their possible status as unregulated securities in the United States.
Immutable’s token sale announcement also raises questions about the transparency of the company’s operations and finances. Immutable has a reputation for being one of the most successful blockchain startups in Australia, with generous pay packages and a rapidly growing workforce. However, the recent layoff of staff and the sale of tokens through a Cayman Islands-based entity have raised concerns about the company’s long-term financial sustainability.
The sale of IMX tokens may have raised funds for the company, but it needs to be clarified whether it is enough to sustain its operations in the long term. The volatile nature of cryptocurrencies and the ongoing uncertainties in the regulatory environment make it difficult for startups like Immutable to secure their position in the market.
