- Grayscale said it disagrees with the SEC staff on the proposal that Filecoin (FIL) is a security.
- The letter from the SEC staff was sent on May 16, 2023 after Grayscale applied to list itself on the Grayscale® Filecoin Trust (FIL) (OTCQB: FILG).
- The SEC staff also believes that Grayscale® Filecoin Trust “meets the definition of an investment company under the Investment Companies Act of 1940.”
Grayscale says it has received comments from U.S. Securities and Exchange Commission (SEC) staff regarding the underlying assets of Grayscale® Filecoin Trust (FIL) (OTCQB: FILG), which the digital asset manager is considering registering.
especially grayscale press release points to a letter sent by SEC officials on May 16. FIL, the native token of the Filecoin cryptocurrency ecosystem, “meets the definition of a security,” according to the staff.
The SEC’s comments emphasized that this view was made with an understanding of securities law.
Grayscale disagrees with SEC letter that FIL is a security
Filecoin Trust appears to “also meet the definition of an investment company under the Investment Companies Act 1940,” the letter said. The staff then asked Grayscale to seek the cancellation of FILG’s registration filed in April.
“Grayscale does not consider FIL to be a security under the federal securities laws and intends to promptly respond to the SEC staff regarding the legal basis for Grayscale’s position.‘, Grayscale said in a press release on Wednesday.
Grayscale said it was difficult to tell whether U.S. regulatory staff would agree with the assessment that Filecoin is not a security. The company says that if their communications fail to convince the SEC, they may have to seek accommodation with the Filecoin Trust.
The company has taken the recommended course of action and may dissolve the trust, the statement said.
Grayscale filed a lawsuit against the SEC in 2022 after the SEC rejected the company’s application to convert the Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF).
Meanwhile, the SEC has sued Ripple, the developer of the cryptocurrency XRP, for allegedly selling unregistered securities by a blockchain company. The lawsuit has been ongoing since December 2020, but the conclusion seems imminent.
Elsewhere, the agency has been criticized for its approach to regulating cryptocurrencies, particularly for enforcement-based regulation seen in the last few months.
