Didn't know the new KTM's were coming with the immobilizer system.
That being said, it is probably a RFID chip in your key that responds through an antenna surrounding the keylock itself. BMW's had a major problem with the antenna ring going bad.
The antenna has a 2 or 3 wire connector going to it. Hopefully it has just come loose. There is no way of getting around the immobilizer, other than replacing the ECU and key. KTM mothership would keep a pretty tight reign on new ECU's, not to mention the cost of an ECU.
Good Luck with this.