SEC Believes Filecoin Could Be a Security

Grayscale Investments submitted on April 14 an application to the SEC to register the Grayscale Filecoin Trust investment product.

However, the SEC staff responded on May 16, suggesting that the trust’s underlying asset, Filecoin (FIL) cryptocurrency, conforms to the definition of an investment contract under federal law.

Grayscale believes that FIL does not meet this definition and has responded to the Commission, explaining its legal basis.

The SEC Chairman has previously stated that most cryptocurrencies are securities, though Grayscale is unsure if the regulator will change its opinion on this matter. If not, Grayscale suggests either finding an appropriate jurisdiction to register a trust, or liquidate the product.