SEC sees signs that Filecoin may be a security

The SEC believes that the Filecoin (FIL) cryptocurrency meets the definition of a security. Grayscale Investments said, citing a regulator’s comment.

On 14 April 2023, the digital-asset manager filed with the regulator an application to register the Grayscale Filecoin Trust as an investment product.

On 16 May, the Commission’s staff expressed the view that the underlying asset of the trust meets the definition of an investment contract under federal law. The regulator’s team demanded that Grayscale withdraw its application for product approval.

“The company does not believe that FIL is a security […] and intends to respond promptly to SEC staff, clarifying the legal basis for its position,” Grayscale said.

The firm noted that it could not forecast whether it would be possible to change the regulator’s stance. If not, Grayscale would consider either seeking a suitable jurisdiction to register the trust or liquidating the product.

Earlier, SEC Chair Gary Gensler stated that most cryptocurrencies are securities.

Grayscale runs 17 digital-asset trusts.

Back in June 2022, the company filed a lawsuit against the regulator over the refusal to convert Grayscale Bitcoin Trust into a Bitcoin ETF.