US SEC says Filecoin (FIL) is a security

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The US securities regulatory body sent a notice to the Grayscale firm to withdraw its Form 10 application for a Filecoin Trust product.

Grayscale Investments (Grayscale) is a US-based digital currency asset management company and a subsidiary of Digital Currency Group (DCG). In 2013, Grayscale was founded. 

The grayscale firm has been providing the “Grayscale Filecoin Trust” product for customers since 17 March 2021. On 4 April of this year, Grayscale lodged a Form 10 application with the United States Securities and Exchange Commission (SEC) to launch an updated Filecoin Trust product.

On 17 May 2023, Grayscale firm informed the crypto community that the SEC body sent a letter against the Form 10 application & said that Filecoin is a security under the purview of the SEC body, so better to withdraw the application.

According to the Grayscale team, Filecoin (Fil) is not a security under its purview and also its team will send an explanation regarding this crypto asset to the SEC staff. 

“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 stated.

Grayscale firm failed to predict whether the SEC will accept its application on behalf of its explanation or not but hinted that there are possibilities that Grayscale will be forced to dissolve its existing “Grayscale Filecoin Trust” fully. 

Filecoin is a crypto focussed project which was launched by Californian blockchain firm Protocol Labs in 2014. Filecoin is a secentralised data storage platform and there people can store their data in exchange for Fil coin (FIL).

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