
- The U.S. SEC sent Grayscale a comment letter saying the company is selling FIL, an unregistered security.
- Grayscale responded to the SEC explaining why FIL is not a security.
- FIL had an interesting reaction to the SECโs comments.
The current crypto bear market is one of the industry’s toughest. And not only because digital asset prices remain suppressed.
Another reason for the severity of the bear market is the tough regulatory environment, especially in the U.S. For example, Grayscale just received a letter from the SEC implying that the fund sells unregistered securities.
SEC Thinks FIL Is Security
FIL, the largest decentralized storage protocol Filecoinโs native currency, is a security.
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Thatโs at least what the U.S. Securities and Exchange Commission (SEC) thinks. On Wednesday, Grayscale, a digital asset manager, said it received a comment letter from the SEC claiming that the company is selling unregistered securities, including FIL.
Grayscale also added that the SEC โrequested that Grayscale seek withdrawal of the registration statement promptly.โ
However, Grayscale disagreed with the SECโs comments. The company believes that FIL isnโt a security โunder the federal securities lawsโ and intends to respond to the SEC by explaining why.
At the same time, Grayscale admitted that itโs unable to predict whether the SEC will agree with the companyโs response.
โGrayscale cannot predict whether the SEC staff will be persuaded that Grayscaleโs position is correct, and if not, whether it may become necessary for Grayscale to seek accommodations that would enable the Trust to register under the Investment Company Act of 1940 or, alternatively, seek dissolution of the Trust.โ
FIL, on the other hand, had no material reaction to the SECโs comments.
Filecoin (FIL) Price Remains Unchanged After SEC Comments
Filecoinโs FIL, which the SEC believes is a security and shouldโve registered with the agency, reacted fairly to the SECโs comments.
FIL is currently trading at $4.50, up 1.9% on the day, according to data from CoinGecko. FIL is down over 98% from its all-time high of $236.84.
FIL has a market cap of $1.91 billion and is the 33rd largest cryptocurrency in the industry.
On the Flipside
- The SECโs comments donโt mean the agency will file an enforcement action against Grayscale.
Why This Matters
The SEC has been waging a war against the cryptocurrency industry. If the SEC officially deems FIL and other cryptocurrencies securities, the whole industry might suffer a terrible blow.
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Coinbase Halts ETH Staking Reward Withdrawals: Is SEC Action Related?
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