BREAKING NEWS: SEC ready to investigate Filecoin too!

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BREAKING NEWS: SEC ready to investigate Filecoin too!
BREAKING NEWS: SEC ready to investigate Filecoin too! (Provided by Financial World)

The Security and Exchange Commission (SEC) is ready to investigate the actions of cryptocurrencies operator Filecoin Trust. Grayscale said in a press release that it has received a comment letter from the SEC stating that the Filecoin Trust product would meet the criteria of a security, with all the legal consequences this entails.

The deal is just the latest in the saga of SEC scrutiny of crypto tokens and their status under US law. SEC Chairman Gary Gensler has repeatedly stated that most cryptocurrencies are securities, while fundamentally differing from the opinion of the crypto industry.

BREAKING NEWS: SEC ready to investigate Filecoin too!

Last April, Grayscale said SEC previously contacted the company at the time regarding its analysis of FIL under financial products laws. Grayscale recognized that FIL could currently be a security, just as it might in the future be held as such by a court under federal law.

This, despite a contrary opinion of the company, underlining the ambiguity of the regulation. Grayscal said: “The SEC staff has asked Grayscale to promptly request the withdrawal of the filing application. Grayscale, however, does not believe that the FIL crypto is a security under the federal financial products laws, and intends to promptly respond to the staff of the SEC with a legally based explanation expressing the company's position." Grayscale would already be ready to seek solutions that allow the Trust to register under the Investment Company Act.

Filecoin is an open-source, public cryptocurrency and digital payment system intended to be a blockchain-based cooperative digital storage and data retrieval method.It is made by Protocol Labs and shares some ideas from InterPlanetary File System allowing users to rent unused hard drive space.[6] A blockchain mechanism is used to register the deals.

Filecoin is an open protocol and backed by a blockchain that records commitments made by the network’s participants, with transactions made using FIL, the blockchain's native currency. The blockchain is based on both proof-of-replication and proof-of-spacetime.