Grayscale Investments, a prominent firm managing digital currency assets and sponsor of Grayscale Filecoin Trust has officially asked the Securities and Exchange Commission (SEC) to withdraw the Trust’s Registration Statement on Form 10.
Although the withdrawal has been made, the company plans to maintain transparency for investors by continuing to provide reports for the Trust, following the Alternative Reporting Standards of OTCQB.
Grayscale willingly submits Registration Statements on Form 10 to the SEC to improve risk disclosures, ensure fairness, and enhance its products, ultimately boosting transparency for investors.
Grayscale Investments first filed the Trust’s Registration Statement on April 14, 2023. On May 16, 2023, the company revealed that it received a comment letter from the SEC staff suggesting the removal of the Trust’s Registration Statement. The SEC staff viewed Filecoin (FIL), the underlying asset of the Trust, as meeting the definition of security under federal securities laws.
On June 6, 2023, Grayscale replied to the SEC staff, presenting a legal argument supported by an analysis of the Howey case law. They asserted that FIL should not be considered a security. However, despite the SEC designating FIL as a security in federal district court filings, the SEC staff continued to request Grayscale to withdraw the Trust’s Registration Statement through subsequent written communications. Grayscale’s withdrawal request reiterates their belief that FIL is not a security, as stated in their letter on June 6, 2023.
It’s important to mention that the SEC views Filecoin as a security in the ongoing lawsuit involving Binance and Coinbase. However, Protocol Labs, the company responsible for developing Filecoin, disagrees with the SEC’s allegations. Protocol Labs emphasizes the importance of multiple FILs and challenges the SEC’s definition of Filecoin in its enforcement actions against exchanges. Furthermore, several policymakers, including members of the US Congress, have publicly expressed their belief that Filecoin should not be categorized as a security.
Grayscale Investments is a cryptocurrency investment firm that offers investment products focused on digital assets, primarily Bitcoin and other cryptocurrencies. The company provides a platform for investors to gain exposure to cryptocurrencies without directly owning or managing the underlying assets.
Grayscale Investments was founded in 2013 by Barry Silbert and is based in the United States. It operates as a subsidiary of Digital Currency Group, a venture capital firm focused on the digital currency industry.