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In a recent surprising development, Grayscale Investments has been advised by the U.S. Securities and Exchange Commission (SEC) to withdraw its proposition for a Filecoin Trust. This caution stems from the SEC's perspective that Filecoin, the trust's underlying asset, could potentially be categorized as a security under federal law.
Grayscale, on April 14, submitted a Form 10 application to the SEC, indicating its intent to upgrade its existing Filecoin Trust product. The transition was intended to make the trust behave more like a publicly traded entity with regular quarterly financial reporting obligations.
On May 16, the SEC sent Grayscale a formal letter, highlighting their concerns that FIL
In a recent surprising development, Grayscale Investments has been advised by the U.S. Securities and Exchange Commission (SEC) to withdraw its proposition for a Filecoin Trust. This caution stems from the SEC's perspective that Filecoin, the trust's underlying asset, could potentially be categorized as a security under federal law.
Grayscale, on April 14, submitted a Form 10 application to the SEC, indicating its intent to upgrade its existing Filecoin Trust product. The transition was intended to make the trust behave more like a publicly traded entity with regular quarterly financial reporting obligations.
On May 16, the SEC sent Grayscale a formal letter, highlighting their concerns that FIL could be classified as a security. The SEC strongly suggested Grayscale retract its application, putting the future of the trust product in question.
Maintaining its stance, Grayscale defended its perspective, stating its belief that Filecoin is not a security. The company plans to respond to the SEC, providing justification for its viewpoint.
Grayscale, however, admitted the uncertainty surrounding whether the SEC will be convinced by its argument. The firm is considering seeking alternative measures to register the trust if needed. In a starkly ominous tone, Grayscale also hinted at possibly dismantling the trust completely.
Previously, on March 17, 2021, Grayscale launched the Filecoin Trust alongside similar offerings for Chainlink's oracle network and Decentraland's metaverse platform.
The SEC's latest move reflects its continued tightening of rules on cryptocurrency products. A number of U.S. crypto exchanges have recently been under the regulator's radar.
Notably, Kraken, a U.S.-based crypto exchange, was penalized by the SEC on February 9 for selling unregistered securities. The regulator also directed Kraken to discontinue its staking-as-a-service program.
Grayscale's future moves remain uncertain, while SEC's actions underpin the continued scrutiny and tightening regulations impacting the broader cryptocurrency landscape.
could be classified as a security. The SEC strongly suggested Grayscale retract its application, putting the future of the trust product in question.
Maintaining its stance, Grayscale defended its perspective, stating its belief that Filecoin is not a security. The company plans to respond to the SEC, providing justification for its viewpoint.
Grayscale, however, admitted the uncertainty surrounding whether the SEC will be convinced by its argument. The firm is considering seeking alternative measures to register the trust if needed. In a starkly ominous tone, Grayscale also hinted at possibly dismantling the trust completely.
Previously, on March 17, 2021, Grayscale launched the Filecoin Trust alongside similar offerings for Chainlink's oracle network and Decentraland's metaverse platform.
The SEC's latest move reflects its continued tightening of rules on cryptocurrency products. A number of U.S. crypto exchanges have recently been under the regulator's radar.
Notably, Kraken, a U.S.-based crypto exchange, was penalized by the SEC on February 9 for selling unregistered securities. The regulator also directed Kraken to discontinue its staking-as-a-service program.
Grayscale's future moves remain uncertain, while SEC's actions underpin the continued scrutiny and tightening regulations impacting the broader cryptocurrency landscape.
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