- Grayscale filed a Form 10 application to found an updated Filecoin Trust
- They will seek accommodations to register the trust
The US Securities and Exchange Commission (SEC) has requested that Grayscale Investments withdraw its application for a Filecoin Trust because Filecoin “can be seen as a security,” Cointelegraph reported, citing an announcement from Grayscale.
Trust would have been similar to a public company
Grayscale filed a Form 10 application with the SEC to found an updated Filecoin Trust product about a month ago. It would have been similar to a listed company and would have filed regular financial reports.
However, the SEC warned Grayscale in a letter on May 16 that Filecoin (FIL) met “the definition of a security” according to federal law and requested they pull their application for the trust product.
Grayscale will persist
According to Grayscale, Filecoin is not a security. They plan to send the regulator justification for their reasoning to this end. The company feels the SEC’s actions and decisions cannot be predicted, but they will probably “seek accommodations” to register the trust. However, they are concerned that they might be asked to dissolve the trust.
Grayscale launched the Grayscale Filecoin Trust in 2021. There were similar products at the time, such as ones for Chainlink and Decentraland.
The watchdog’s relentless crackdown on crypto continues
Tech firm Protocol Labs created Filecoin in 2014 as a decentralized platform for data storage. Users store their data with providers and pay them in the FIL token.
The latest news reflects a series of crackdowns on crypto products. The SEC has come down hard on US-based crypto exchanges like Kraken and Coinbase. In February, Bankless Times reported that Kraken agreed to pay the SEC a settlement of $30 million and close its crypto staking platform for US users after being charged with selling unregistered securities.
More recently, the SEC accused Coinbase of violating securities laws in operating its staking and exchange services. The regulator sent the exchange a Wells notice in March to inform that its planned future course of action may include an injunction. It didn’t specify how Coinbase had violated the law.
