JUST IN: Grayscale Investments revealed Wednesday that the U.S. Securities and Exchange Commission thinks the Filecoin token $FIL might be a security. nikhileshde reports
The U.S. Securities and Exchange Commission asked Grayscale to withdraw its application to launch a Filecoin Trust product, the asset manager revealed Wednesday.that it had received a comment letter from the federal securities regulator saying FIL"meets the definition of a security."
"The SEC staff requested that Grayscale seek withdrawal of the registration statement promptly," Grayscale said."Grayscale does not believe that FIL is a security under the federal securities laws and intends to respond promptly to the SEC staff with an explanation of the legal basis for Grayscale’s position.
Grayscale"acknowledges that FIL may currently be a security, based on the facts as they exist today, or may in the future be found by the SEC or a federal court to be a security under the federal securities laws, notwithstanding [Grayscale's] prior conclusion," the company said at the time. FIL's price dropped nearly 3% on the news of the filing, before rebounding slightly and trading at $4.51 at press time, according toThe back-and-forth reflects SEC staffers’ growing scrutiny of crypto tokens and their status under U.S. securities law. SEC Chair Gary Gensler has repeatedly said that most cryptocurrencies are securities, a stance that fundamentally differs with that of the crypto industry, including Grayscale.
Issuers of securities have to register with the SEC and provide regular disclosures. The SEC has been cracking down on cryptocurrencies, especially projects which raised funds through initial coin offerings , since 2017, forcing many of these projects to refund investors or shut down. Filecoin raised $200 million via an ICO.to its April Filecoin Trust disclosure related to its trust products for Stellar’s XLM, Zcash’s ZEC and Horizen’s ZEN.
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