SEC deems Filecoin a security, asks Grayscale to withdraw trust registration SEC deems Filecoin a security, asks Grayscale to withdraw trust registration
The FIL token briefly lost 3% of its value before recovering almost entirely.
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Updated: May. 18, 2023 at 2:59 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Grayscale said May 17 that the U.S. Securities and Exchange Commission (SEC) asked it to withdraw the registration statement for its Filecoin Trust.
The SEC told Grayscale that Filecoin’s FIL token meets the definition of a security under the relevant laws. This, in turn, means that Grayscale’s Filecoin Trust is an investment company. Grayscale was told to “promptly” withdraw its registration.
Grayscale asserted that Filecoin’s FIL token is not a security and said that it intends to respond to the SEC. However, Grayscale is not certain whether the SEC will agree with its legal argument, allow it to seek accommodation, or force it to dissolve the Filecoin Trust.
The news briefly saw Filecoin’s value drop from $4.59 to $4.46 in minutes, representing a sudden 3% drop. However, the asset’s value has since recovered to $4.57.
Grayscale’s website lists its Filecoin Trust alongside numerous other cryptocurrency trusts, including its noteworthy Grayscale Bitcoin Trust (GBTC).
It is unclear why the SEC specifically targeted the company’s Filecoin Trust. It is also unclear whether the securities regulator intends to take action against Filecoin itself or against any of Grayscale’s other cryptocurrency trusts.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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Filecoin is a peer-to-peer network that stores files on the internet, with built-in economic incentives to ensure files are stored reliably over time..
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.