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SEC deems Filecoin a security, asks Grayscale to withdraw trust registration

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Grayscale said May 17 that the U.S. Securities and Exchange Commission (SEC) asked it to withdraw the registration statement for its Filecoin Trust.

The SEC told Grayscale that Filecoin’s FIL token meets the definition of a security under the relevant laws. This, in turn, means that Grayscale’s Filecoin Trust is an investment company. Grayscale was told to “promptly” withdraw its registration.

Grayscale asserted that Filecoin’s FIL token is not a security and said that it intends to respond to the SEC. However, Grayscale is not certain whether the SEC will agree with its legal argument, allow it to seek accommodation, or force it to dissolve the Filecoin Trust.

The news briefly saw Filecoin’s value drop from $4.59 to $4.46 in minutes, representing a sudden 3% drop. However, the asset’s value has since recovered to $4.57.

Grayscale’s website lists its Filecoin Trust alongside numerous other cryptocurrency trusts, including its noteworthy Grayscale Bitcoin Trust (GBTC).

It is unclear why the SEC specifically targeted the company’s Filecoin Trust. It is also unclear whether the securities regulator intends to take action against Filecoin itself or against any of Grayscale’s other cryptocurrency trusts.

The post SEC deems Filecoin a security, asks Grayscale to withdraw trust registration appeared first on CryptoSlate.

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