SEC crackdowns on crypto firms have intensified since last year’s bear market, provoked by multiple collapses and bankruptcy filings of crypto exchanges.
United States Securities and Exchange Commission (seconds) tagged Filecoin (Phil) as an unregistered security. As a result, the regulator expects Grayscale Investments to file its application for the Filecoin Trust.
according to a Updates In a statement on Form 10 provided by Grayscale regarding the trust’s registration status, a letter was sent by the SEC detailing the classification of the FIL.
Notably, the crypto investment management firm launched the Grayscale Filecoin Trust in March 2021 and this gives investors indirect access to Filecoin tokens. To meet the firm’s outlined product lifecycle, Grayscale filed Form 10 with the SEC on Friday, April 14, 2023, to obtain SEC reporting status.
“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 the Trust meets the definition of a investment company under the Investment Company Act of 1940, according to a statement published by Grayscale announcing the SEC report.
FIL’s classification as securities is in good agreement with Grayscale and the crypto manager is preparing a response to the SEC that will outline the legal basis for its dissent.
By the time Grayscale convinces the regulator, the company has only two options left for the trust; Either find accommodation that enables the trust to be registered under the Investment Companies Act of 1940 or eventually dissolve the trust. Therefore, investors are expected to be prepared for any eventuality from SEC and Grayscale.
SEC Crackdown on Crypto Firms, Beyond Grayscale and Filecoin
Obviously, the SEC’s crackdown on crypto firms has intensified since last year’s bear market prompted multiple collapses and bankruptcy filings of crypto exchanges. To the dismay of investors and crypto heavyweights, many crypto assets fall under the securities category.
So far, only bitcoin (B T c) has been excluded from the group according to Gary GenslerSEC Chairman.
Due to this situation, a long list of crypto firms have faced enforcement actions by the SEC with some issuing lawsuits and currently trying to defend themselves. One of the longest such lawsuits is the SEC’s case with Ripple. Ripple was indictment Based on the offering of XRP for sale and the classification of the regulator, XRP are unregistered securities. Furthermore, BTC mining firm Marathon Digital Holdings recently issue summons by the SEC for violating federal securities laws.
Famous American cryptocurrency exchange Coinbase Global Inc (NASDAQ: COIN) also Received A Wells notice from the US regulator indicated that it was involved in unregistered securities trading, therefore violating securities laws. Other exchanges such as Kraken and Bittrex have also received enforcement action from the SEC.
Benjamin Godfrey is a blockchain enthusiast and journalist who loves to write about real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies drives his contributions to well-known blockchain-based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
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