Grayscale also noted that it does not believe Filecoin is a security and is seeking to respond to the SEC staff with a legal basis for their position.
Earlier this week, the US Securities and Exchange Commission (SEC) designated Filecoin cryptocurrency as a security and even ordered asset manager Grayscale to withdraw their application for the Grayscale Filecoin Trust. However, Filecoin has rejected the SEC’s note adding that FIL is not a security. The Filecoin Foundation describes the blockchain network as a “decentralized, peer-to-peer network for file storage.”
Is FIL safe?
In an emailed statement to crypto news publication CryptoSlate, Filecoin male:
“Over the past decade, thousands of people around the world have contributed to this open source project to create a decentralized, efficient, and robust foundation for humanity’s most important information. This includes hundreds of organizations and teams building on the network, thousands of storage providers, and 13,000 Github contributors, building a next generation base layer. coming from the web.
However, the SEC action did not trigger much movement in Filecoin (FIL) price. As of press time, FIL is trading down 1.98% at $4.46 and has a market cap of $1.8 billion.
SEC and cryptocurrency
The US securities regulator has been on the hunt for crypto assets. SEC Chairman Gary Gensler also stated that almost every other cryptocurrency is classified as a security and therefore must be subject to federal securities laws.
Previously, Grayscale submitted a Form 10 application to make the Grayscale Filecoin Trust a reporting firm where they file quarterly reports in addition to annual reports. However, the SEC has asked Grayscale to withdraw this request. In its press release, Grayscale male:
On May 16, 2023, Grayscale received a comment letter from SEC personnel stating its view that the underlying asset of the trust, the FIL, meets the definition of a security under the federal securities laws, and therefore the Trust appears to meet the definition of an investment firm under the Investment Company Act of 1940. Request SEC employees that Grayscale seek to immediately withdraw its registration statement.”
However, Grayscale also indicated that it does not believe Filecoin is a security and is seeking to respond to the SEC staff with a legal basis for their position. It will be interesting to see what actions the SEC initiates on the decentralized storage platform, Filecoin.
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Bhushan is a financial technology enthusiast with a good knack for understanding financial markets. His interest in economics and finance has turned his attention towards the new emerging Blockchain technology and Cryptocurrency markets. He is persistent in the learning process and keeps himself motivated by sharing the knowledge gained. In his spare time he reads fantasy and thriller novels and occasionally explores his culinary skills.