SEC sees signs of a security in the Filecoin platform’s token

This is how the regulator commented on Grayscale’s application to register a trust based on cryptocurrency

18.05.2023 - 07:20

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3 min

What’s new? The US Securities and Exchange Commission (SEC) has urged digital asset management company Grayscale Investments to withdraw its application for a Filecoin Trust. Grayscale filed with the agency on April 14 to launch the product, and on May 16 received a response in which the regulator warned that the FIL token “meets the definition of a security” under federal law.

Grayscale’s press release

What else is known? According to Grayscale, FIL is not a security, and they intend to send an explanation of their arguments to the SEC. The company said it “cannot predict” whether it will be able to convince the commission to accept its explanation, and if not, Grayscale will seek terms that will allow it to register a Filecoin Trust under the law. Alternatively, the company may be forced to liquidate the fund entirely.

What is known about Grayscale? It is a digital asset management fund founded in 2013. It allows US-accredited investors to buy cryptocurrency investment products in a regulated environment through traditional market instruments. It is part of Barry Silbert’s Digital Currency Group (DCG) conglomerate, which ran into problems earlier this year paying off liabilities and began selling shares of Grayscale crypto trusts for that purpose.

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What is known about Filecoin? It is a decentralized file storage system launched in 2017. The platform raised $257 million in an initial coin offering (ICO). As of May 18, 06:40 UTC, the native token FIL is trading at $4,55, having gained 2,9% in 24 hours (CoinGecko’s data). In April, the project’s team launched its own cloud computing platform for creating decentralized applications (DApps) called Filecoin Web Services (FWS).

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