SEC Staff Suggests Grayscale’s Filecoin is a Security, Says Firm


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. 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 the securities laws. The Filecoin Trust appears to also “meet the definition of an investment company under the Investment Company Act of 1940,” the letter stated.

Grayscale says it disagrees with SEC’s staff over suggestions that Filecoin (FIL) is a security. The company says if their communication fails to persuade the SEC, it may have to seek accommodations in the quest to register the Filecoin Trust. Alternatively, the company could also go the recommended way and have the Trust dissolved.

Grayscale filed a lawsuit against the SEC in 2022 after the agency denied the company’s application to convert its Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF). The SEC on the other hand sued Ripple, the company behind the XRP cryptocurrency over allegations the blockchain firm had been selling unregistered securities. That case has dragged since December 2020, although its conclusion looks to be imminent.

Elsewhere, the agency has been criticized for its approach to crypto regulation, particularly with regard to its regulation by enforcement as seen over the past several months.

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