Grayscale Investments found itself in the crosshairs of the United States Securities and Exchange Commission (SEC) as the regulatory body demanded the withdrawal of its application for a Filecoin Trust. The SEC raised concerns over the classification of Filecoin, considering it a potential security.
Grayscale had eagerly submitted a Form 10 application on April 14, seeking approval for an upgraded Filecoin Trust offering. The purpose was to establish Filecoin (FIL) Trust as a publicly reporting firm in accordance with Section 12(g) of the Securities Exchange Act of 1934.
If approved, this would have compelled the company to disclose quarterly and annual reports to the public.
On May 17th, a press release revealed that the United States Securities and Exchange Commission (SEC) has requested Grayscale Investments, the largest digital currency asset manager around the world, to revoke its application for Filecoin Trust products.
In response to the SEC’s comment letter, Grayscale reportedly said “Grayscale does not believe that FIL is a security under the federal securities laws and intends to respond promptly to the SEC staff with an explanation of the legal basis for Grayscale’s position.”
Grayscale has acknowledged the uncertainty surrounding the SEC’s decision and stated that it is unable to foresee whether the SEC will be convinced by their explanation. In light of this, Grayscale mentioned the possibility of pursuing alternative measures or accommodations for the registration of the Trust.
Also read: SEC Counters Coinbase’s Petition for Urgent Crypto Regulations
