Grayscale Investments faces SEC scrutiny over Filecoin Trust registration

Grayscale Investments has been requested by the Securities and Exchange Commission to withdraw the registration statement shared for Filecoin Trust as a securities asset. 

Founded in 2013, Grayscale is a digital currency asset manager and sponsor of Grayscale Filecoin Trust (FIL). The registration statement, filed with the SEC on April 14, 2023, registered the shares of the Trust according to Section 12(g) of the Securities Exchange Act of 1934. 

However, Grayscale received a comment letter from the SEC staff stating that the Trust’s underlying asset, FIL, meets the definition of  security under federal securities laws. Consequently, the SEC concluded that the Trust falls within the definition of an investment company under the Investment Company Act of 1940.

In response to this request, Grayscale maintains that FIL is not a security under federal securities laws and plans to provide a prompt explanation of the legal basis for its position, instead of withdrawing their claim.

According to Grayscale, the decision of the SEC staff remains uncertain. It is unclear whether the Trust will need to seek accommodations for registration under the Investment Company Act of 1940 or if dissolving the Trust will become necessary.

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