In an unexpected development, the Securities and Exchange Commission (SEC) has asked Grayscale Investments to withdraw his request for a Filecoin Trust. There DRY argues that the THREAD of Filecoin, the underlying asset of the trust, could be qualified as a financial security.
Grayscale first submitted a Form 10 request for his Filecoin Trust on April 14, transforming his trust more into a public company that would present its financial activity in quarterly reports.
The SEC Warnings and Grayscale’s Response
On May 16, the DRY communicated its position to Grayscalewarning that the token THREAD corresponds to the definition of a financial security under federal law. The committee asked Grayscale to withdraw the application for the Trust product in response thereto.
However, Grayscale has a different view. The investment company not consider filecoin as a financial security and plans to present its case to the SEC soon.
Grayscale does not believe FIL to be a financial security under federal securities laws and intends to respond promptly to SEC staff with an explanation of the legal basis for Grayscale’s position.
Statement from Grayscale
A Brief Overview of Filecoin and Grayscale’s Warning
filecoin, developed by Protocol Labs in 2014, is a decentralized data storage platform. It works on the principle of users paying in FIL tokens to have their data stored by providers, with these providers receiving FIL for their services. THE Filecoin Trust Grayscale was launched in March 2021, alongside similar services for MANA of Decentraland And chain link with the LINK.
Although Grayscale intends to challenge the SEC’s position, it acknowledges the uncertainty of the outcome. The investment company warns that it may have to seek accommodations for the registration of the Trust or, in the worst case, could be forced to dissolve the Trust in its entirety.
This recent update signifies a continuation of the rigorous monitoring of the products of crypto currencies by the SEC. The regulator was particularly strict with the exchanges crypto americans recently. In February, the SEC condemned kraken, for “selling unregistered financial securities” and ordered the exchange to cease its staking-as-a-service program. Moreover, Coinbase received a typical legal notice preliminary to enforcement action for “potential violations of securities laws” in March and recently announced that it was suspending rewards from its trading platform. staking.
With the constant pressure for innovation in the world of cryptocurrencies, the balance between technological innovation and regulatory compliance remains a significant challenge.
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