• Grayscale received a letter from the SEC staff suggesting that Filecoin (FIL) is a security
• The SEC believes the Grayscale® Filecoin Trust (FIL) (OTCQB: FILG) meets the definition of an Investment Company Act of 1940.
• Grayscale disagrees with the SEC’s view and intends to respond promptly to explain its position
Grayscale Receives Comment from SEC Staff
Grayscale says it received comment from the US Securities and Exchange Commission (SEC) staff regarding the underlying asset of the Grayscale® Filecoin Trust (FIL) (OTCQB: FILG) that the digital asset manager was looking to register. In particular, Grayscale’s press release points to a letter from SEC staff sent on 16 May.
Filecoin Meets Definition Of Security
According to the staff, FIL, the native token of the Filecoin cryptocurrency ecosystem, “meets the definition of a security.” The SEC comment highlighted that this view was taken with an understanding of securities laws. The Filecoin Trust appears to also “meet the definition of an investment company under the Investment Company Act of 1940,” according to what was stated in te letter.
Grayscale Disagrees With Letter
Grayscale does not believe that FIL is a security under federal securities laws and intends to respond promptly to explain its position. It remains unclear if their response will be satisfactory for US regulators or not. If not, then Grayscale may have to seek accommodations or dissolve its Trust for registration purposes.
Previous Lawsuit Against The SEC
This is not first time Grayscal has clashed with regulators over filing applications related securities laws and regulations. Back in 2022, after being denied approval by SEC for converting GBTC into ETF, it had filed lawsuit against them.
Conclusion
It remains unclear how this will play out between Grascale and US regulators but one thing is certain; as crypto adoption rises more such clashes are inevitable going forward between industry players and authorities globally as both sides try find common ground on regulating digital assets without stifling innovation and growth opportunities.