Grayscale also noted that it does not believe Filecoin is a security and wants the SEC staff to respond with a legal basis for their position.
Earlier this week, the US Securities and Exchange Commission (secondsclassified cryptocurrency filecoin as a security and even asked asset manager Grayscale to pull its application for the Grayscale Filecoin Trust. However, Filecoin has rejected the observation from the SEC that FIL was not a security. The Filecoin Foundation describes the blockchain network as “a decentralized, peer-to-peer network for storing files”.
Is FIL a Security?
In an emailed statement to crypto news publication Cryptoslate, Filecoin noted,
“Over the past decade, thousands of people from around the world have contributed to this open-source project to build a decentralized, efficient and robust foundation for humanity’s most important information. It includes hundreds of organizations and teams building on the network, thousands of storage provider and 13,000 Github contributors, building a foundational layer for the next generation of the web.
However, the SEC action hasn’t caused much movement in the price of Filecoin (FIL). As of press time, FIL is trading at a price of $4.46 and down 1.98% at a market cap of $1.8 billion.
SEC and cryptocurrencies
The US securities regulator is going hammer and tongs after crypto assets. SEC Chairman Gary Gensler also stated that almost all other cryptocurrencies are classified as securities and thus will be subject to federal securities laws.
Earlier, Grayscale filed for Form 10 to make the Grayscale Filecoin Trust a reporting company wherein they will be giving quarterly reports as well as annual reports. However, the SEC asked Grayscale to withdraw the application. In its press release, Grayscale noted,
“On May 16, 2023, Grayscale received a comment letter from SEC staff stating that the Trust’s underlying asset, FIL, meets the definition of a security under the federal securities laws, and therefore does not meet the definition of a Trust. appears to be doing. An investment company under the Investment Company Act of 1940. SEC staff requested that Grayscale immediately withdraw the registration details.
However, Grayscale also pointed out that it does not believe Filecoin is a security and that the SEC wants the staff to respond with a legal basis for their position. It will be interesting to see what action the SEC takes on the decentralized storage platform, Filecoin.
Bhushan is passionate about Fintech and has a good grasp of understanding the financial markets. His interest in economics and finance drew his attention to the newly emerging blockchain technology and cryptocurrency markets. He is in the process of continuous learning and keeps motivating himself by sharing his acquired knowledge. In his spare time he reads thriller fiction novels and occasionally explores his culinary skills.
Bitcoin Crypto Related Post