The US Securities and Exchange Commission (SEC) is cracking down on the crypto industry in the US. Crypto fund provider Grayscale planned to create a trust fund for Filecoin (FIL), but unfortunately that is no longer happening. The SEC no longer allows the company to offer this fund to investors. The policy maker sees the altcoin as an unregistered security.
Is Filecoin (FIL) also an effect?
Grayscale writes that in a press release. It is in regular contact with the SEC regarding the status of the assets it offers in its funds. For example, Grayscale previously filed a so-called Form 10 with the SEC to make the Filecoin fund available to investors.
Earlier this week, it was told by the regulator that Filecoin meets the definition of a security – an unregistered security. Therefore, Grayscale is not allowed to offer the Filecoin fund to interested parties. Remarkably enough, the fund itself does not have to be closed for now, its contents simply remain Grayscale’s.
In the press release, the company notes that it does not believe FIL is an unregistered security and will explain to the SEC why it believes so. Yet Grayscale also says it cannot properly gauge the actions of the SEC. It is possible that in the future the fund will be listed on the stock exchange as an investment fund rather than a trust fund, but also that the fund will be completely dismantled.
SEC remains tough on crypto industry
In recent times, the SEC has regularly cracked down on companies it believes offer unregistered securities. Kraken had to stop offering strike because of this reason. Coinbase has even filed a lawsuit because it believes the SEC does not set clear rules.
The SEC also had contact with Grayscale last year because it already found that a number of altcoins are securities. At the beginning of this year all cryptocurrencies after bitcoin (BTC) are securities according to the SEC.
The filecoin price fell immediately after the news was announced. The drop comes after FIL rallied from a value of $4.23 to $4.62 in the past 7 days.