The U.S. Securities and Exchange Commission believes Filecoin may be a security, digital asset manager Grayscale warned investors.
The United States Securities and Exchange Commission believes Filecoin’s nativeAccording to the May 17, Grayscale lodged an application with the regulator to launch a Filecoin Trust product on April 14, which would provide investors with indirect exposure to the underlying FIL token.
In a comment letter from SEC staff on May 16, the regulator then warned Grayscale that FIL “meets the definition of a security” under federal law and asked them to withdraw their application for the Trust product. Grayscale stated that under its view, Filecoin is not a security and will be sending an explanation to the SEC for its reasoning.
“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 noted that it “cannot predict” whether or not the SEC will be persuaded into accepting its explanation, and may “seek accommodations” for the registration of the Trust. Alternatively, the investment firm warned that it may be forced to dissolve the Trust in its entirety.This update from the SEC marks a continuation of the watchdog’s crackdown on crypto products, which has recently come down hard on a number of U.S. crypto exchanges.
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