Filecoin Foundation Lashes Out at SEC for Classifying FIL as Security

On May 19, 2023 at 10:26 am UTC by · 2 mins read

Grayscale also noted that it doesn’t believe that Filecoin is security and seeks to respond to the SEC staff with a legal basis for their position.

Earlier this week, the US Securities and Exchange Commission (SEC) classified the cryptocurrency Filecoin as a security and even asked asset manager Grayscale to pull up their application for the Grayscale Filecoin Trust. However, Filecoin has rejected the observation from the SEC adding that FIL was not a security. The Filecoin Foundation described the blockchain network as “a decentralized, peer-to-peer network for storing files”.

Is FIL a Security?

In an email statement to the crypto news publication CryptoSlate, Filecoin noted:

“Over the last decade, thousands of people around the world have contributed to this open-source project to create a decentralized, efficient, and robust foundation for humanity’s most important information. That includes hundreds of organizations and teams building on the network, thousands of storage providers, and 13,000 Github contributors, building a foundational layer for the next generation of the web.”

The SEC action, however, hasn’t triggered much movement in the Filecoin (FIL) price. As of press time, FIL is trading 1.98% down at a price of $4.46 and a market cap of $1.8 billion.

SEC and Cryptocurrencies

The US securities regulator has been going hammer and tongs after crypto assets. SEC chair Gary Gensler also stated that almost every other cryptocurrency classifies as a security and thus shall be subject to federal securities laws.

Previously, Grayscale had filed for Form 10 to make the Grayscale Filecoin Trust a reporting company wherein they would quarterly reports as well as annual reports. However, the SEC asked Grayscale to withdraw this application. In its press release, Grayscale noted:

“On May 16, 2023, Grayscale received a comment letter from the SEC staff stating its view that the Trust’s underlying asset, FIL, meets the definition of a security under the federal securities laws, and that therefore the Trust appears to meet the definition of an investment company under the Investment Company Act of 1940. The SEC staff requested that Grayscale seek withdrawal of the registration statement promptly.”

However, Grayscale also noted that it doesn’t believe that Filecoin is security and seeks to respond to the SEC staff with a legal basis for their position. It will be interesting to see what actions the SEC initiates on the decentralized storage platform, Filecoin.

Share:

Related Articles

Coinbase Demands SEC to Disclose Full Cost of Crypto Crackdown

By March 3rd, 2025

Coinbase wants to know how many SEC employees worked on crypto cases, their salaries, and how much time they spent on enforcement efforts.

WeekInCrypto: Bitcoin Crashed, SEC Back Off, Experts Stay Bullish

By March 1st, 2025

Despite Bitcoin’s recent volatility, institutional confidence remains strong with Standard Chartered projecting a $500K target. Meanwhile, North Korean hackers executed the largest crypto theft in history and the SEC ended its Uniswap investigation.

SEC Agrees to Drop Lawsuit Against Consensys Over MetaMask Operations

By February 27th, 2025

The SEC has reached a preliminary agreement to end its lawsuit against Consensys, the company behind MetaMask wallet, following accusations that its swap and staking services violated securities laws.

Exit mobile version