Filecoin Foundation Objects To SEC Classifying FIL As A Security

Key Points:

• The Filecoin Foundation has refuted the US Securities and Exchange Commission’s (SEC) assertion that its FIL token is a security.
• The company has described them as “a decentralized, peer-to-peer network for storing files” and unequivocally states that FIL is not secure.
• Earlier, Filecoin Trust registrar, Grayscale also disagreed with the decision of the SEC staff.

According to CryptoSlate, the Filecoin Foundation has refuted the US Securities and Exchange Commission’s (SEC) assertion that its FIL tokens are securities in a statement.

The Filecoin Foundation describes its blockchain network as a “decentralized peer-to-peer network for storing files” and emphasizes that FIL is not a security.

“Over the last decade, thousands of people worldwide have contributed to this open-source project to create a decentralized, efficient, and robust foundation for humanity’s most important information. That includes hundreds of organizations and teams building on the network, thousands of storage providers, and 13,000 Github contributors, building a foundational layer for the next generation of the web.” The Foundation said.

Yesterday, Grayscale revealed that the US Securities and Exchange Commission (SEC) had asked it to withdraw its application to launch a Filecoin trust product (FIL). Grayscale said in a statement that it received comments from the SEC stating that the FIL “meets the definition of a security.”

However, the organization disagrees with the opinion of the SEC staff and does not believe that the FIL is a security under federal securities laws. Grayscale intends to respond promptly to SEC staff to explain the legal basis of the company’s position.

Grayscale cannot predict whether or not SEC staff will be convinced that their position is correct, and if not. Suppose the SEC employee disagrees with Grayscale’s position. In that case, Grayscale may need to seek alternative arrangements allowing the Trust to register under the Investment Companies Act of 1940 or consider dissolution.

Since receiving the negative news, the FIL token has continuously recorded a bearish sign. Currently, FIL is trading at $4.43, down 5% in the last 24 hours.

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