Cryptocurrency

Grayscale Withdraws SEC Application for Filecoin (FIL) Trust Launch

Uncertainty looms over cryptocurrency’s end game in the U.S. after several events within the week.

Grayscale, a leading digital asset management firm, recently filed a request to withdraw its application for a Filecoin (FIL) trust product, per Global Newswire.

Grayscale initially filed an application with the U.S. SEC seeking to convert their Filecoin Trust into a comparable publicly traded product on the stock exchange. However, on May 16, the SEC requested Grayscale to withdraw its application, citing that Filecoin could be classified as a security.

In a letter sent to Grayscale, the regulatory body stated that Filecoin possesses security attributes. Nevertheless, Grayscale respectfully disagreed with the SEC’s stance and intended to present a compelling legal argument.

Grayscale Pulls Back Filecoin Trust Application

The company was determined to provide a strong case on legal grounds to support its position. If the SEC remained unconvinced by Grayscale’s argument, the firm would consider alternative options, including adhering to the provisions set forth in the Investment Companies Act of 1940 or potentially dissolving the Trust.

Upon the withdrawal request, Grayscale remains resolute in its belief that Filecoin (FIL) should not be classified as a security, despite the SEC’s assertion to the contrary.

In recent years, the notion of securities has frequently intersected with the statements and legal proceedings initiated by regulators in the U.S. Particularly, Gary Gensler, the Chairman of the SEC, has repeatedly stated that most cryptocurrencies qualify as securities, with the notable exception of Bitcoin.

Crypto’s End Game in the U.S.?

This week has witnessed a series of impactful events that have shaken the cryptocurrency market. The first blow came in the form of the Securities and Exchange Commission’s (SEC) lawsuits against major players Binance and Coinbase.

Following these allegations, Binance.US made the decision to suspend U.S. dollar deposits and withdrawals, alongside plans to halt their over-the-counter (OTC) services.

Another significant player, the Crypto.com exchange, announced on June 9 that it would no longer cater to institutional-level customers in the United States, effective on June 21.

The rationale behind this move stems from Crypto.com’s assessment of limited demand within the current market landscape for this particular customer segment.

Nonetheless, the company remains committed to serving retail investors in the U.S. and maintains the operation of UpDown Options, a trading platform duly licensed by the U.S. Commodity Futures Trading Commission (CFTC).

In recent developments, the CFTC emerged victorious in a legal battle against the decentralized autonomous organization (DAO) known as Ooki DAO.

Ooki Protocol, a decentralized finance (DeFi) platform built on the Ethereum network, offering lending, borrowing, and margin trading solutions, faced the reality that DeFis are not exempt from regulatory oversight imposed by the CFTC.

U.S. District Judge William H. Orrick delivered a ruling stating that Ooki DAO had operated an unlawful trading platform and illegally functioned as an unregistered commodity futures broker (FCM). The judge imposed a fine of $643,542 on the organization while also ordering them to cease operations and permanently shut down their website.

The original lawsuit was filed in September of last year in the U.S. District Court for the Northern District of California. It accused Ooki DAO of providing leveraged and margin commodity trading services to retail investors without adhering to know-your-customer (KYC) requirements and disregarding CFTC regulations.

The conflicts arising between U.S. regulators and cryptocurrency firms shed light on the intricate nature of the regulatory landscape within the country, emphasizing the critical need for precise and consistent regulatory guidelines.

However, the intensified scrutiny from regulatory bodies is not fostering innovation within the rapidly evolving crypto market as intended. Instead, it has resulted in the curtailment of crypto innovations and the departure of several companies from the market.

The post Grayscale Withdraws SEC Application for Filecoin (FIL) Trust Launch appeared first on Blockonomi.

Related posts
Cryptocurrency

Top Crypto Presale: BlockDAG Leads with $19.3M & 30,000x ROI, Outshining Algotech & Kelexo Presale

As the Algotech presale moves into its third stage, it continues to draw attention in the crypto…
Read more
Cryptocurrency

Bitcoin Runes Set To Usher In The Bull Market With Groundbreaking Technology

Bitcoin’s fourth halving event has come and gone, and the expectation is that a bull market will…
Read more
Cryptocurrency

BlockDAG Dominates With A $18.7M Presale, Overshadowing Uniswap Stability And Toncoin Volatility

In the fluctuating world of cryptocurrencies, while Uniswap demonstrates price stability and Toncoin…
Read more
Newsletter
Become a Trendsetter

Sign up for TheTechly’s Daily Digest and get the latest and trending technology updates.

[mc4wp_form id="729"]