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In the latest in a series of scuffles with crypto-related companies, the SEC has now spoken about Filecoin (FIL), warning Grayscale that these tokens qualify as securities.
As a result, Crypto Manager – which is part of the Digital Currency Group (DCG) – was asked to withdraw the Form 10 request it submitted for Filecoin Trust, which required it to report quarterly results like publicly traded companies. Will have made the unit to do. ,
SEC views Filecoin Trust as an investment company
one in Press release In a May 17 publication, a spokesperson for Grayscale confirmed that the SEC has asked the company to withdraw its application, directing them to register as an investment vehicle instead. investment company act 1940’s. If the Filecoin Trust is registered as an investment company, this could constrain its ability to issue securities, along with other limitations.
However, in order to qualify as an investment company, Filecoin Trust must be classified as an entity that deals primarily in securities investments.
To do this, FIL must pass how testWhich decides whether a transaction qualifies as an investment contract and can therefore be considered a security.
According to the Howey Test, a transaction is considered to be an investment contract if it is an investment of money in a common enterprise with the expectation of profits to be derived from the efforts of others. However, since FIL has a legitimate use case for Filecoin as a method of payment for its data storage services, it is quite possible that this alone would disqualify FIL from passing the Howey Test.
Grayscale vows to fight back
According to the press release, Grayscale has decided to contest the SEC’s decision, although the company will comply if it cannot convince the regulatory body.
“Grayscale does not believe that the FIL is a security under the federal securities laws and intends to promptly respond to SEC staff with an explanation of the legal basis for Grayscale’s position.
Grayscale cannot predict whether or not Grayscale’s position to SEC employees is correct, and if not, whether it may be necessary for Grayscale to (…) enable the trust to register under the ICA of 1940 or alternatively, seeks dissolution of the trust.”
The news of the latest regulatory action targeting FIL sent the token’s price on a brief downtrend. however, According Per CoinGecko, the coin has since rebounded and is trading at around $4.60 at the time of writing this article.
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In the latest in a series of scuffles with crypto-related companies, the SEC has now spoken about Filecoin (FIL), warning Grayscale that these tokens qualify as securities.
As a result, Crypto Manager – which is part of the Digital Currency Group (DCG) – was asked to withdraw the Form 10 request it submitted for Filecoin Trust, which required it to report quarterly results like publicly traded companies. Will have made the unit to do. ,
SEC views Filecoin Trust as an investment company
one in Press release In a May 17 publication, a spokesperson for Grayscale confirmed that the SEC has asked the company to withdraw its application, directing them to register as an investment vehicle instead. investment company act 1940’s. If the Filecoin Trust is registered as an investment company, this could constrain its ability to issue securities, along with other limitations.
However, in order to qualify as an investment company, Filecoin Trust must be classified as an entity that deals primarily in securities investments.
To do this, FIL must pass how testWhich decides whether a transaction qualifies as an investment contract and can therefore be considered a security.
According to the Howey Test, a transaction is considered to be an investment contract if it is an investment of money in a common enterprise with the expectation of profits to be derived from the efforts of others. However, since FIL has a legitimate use case for Filecoin as a method of payment for its data storage services, it is quite possible that this alone would disqualify FIL from passing the Howey Test.
Grayscale vows to fight back
According to the press release, Grayscale has decided to contest the SEC’s decision, although the company will comply if it cannot convince the regulatory body.
“Grayscale does not believe that the FIL is a security under the federal securities laws and intends to promptly respond to SEC staff with an explanation of the legal basis for Grayscale’s position.
Grayscale cannot predict whether or not Grayscale’s position to SEC employees is correct, and if not, whether it may be necessary for Grayscale to (…) enable the trust to register under the ICA of 1940 or alternatively, seeks dissolution of the trust.”
The news of the latest regulatory action targeting FIL sent the token’s price on a brief downtrend. however, According Per CoinGecko, the coin has since rebounded and is trading at around $4.60 at the time of writing this article.
Binance Free $100 (Exclusive): Use this link to register and get $100 free and 10% off on Binance Futures for the first month. (terms).
PrimeXBT SPECIAL OFFER: Use this link to register and enter the code CRYPTOPOTATO50 to receive up to $7,000 on your deposit.
