As we have discussed often in this space, Chairman Gary Gensler of the United States Securities and Exchange Commission has repeatedly expressed his view that most cryptocurrency tokens are unregistered securities and that, in his view, existing securities laws are clear enough for cryptocurrency firms to comply with them.  The crypto industry has a different view and, among other things, has bemoaned the practice of the SEC’s labeling of certain tokens as investment contracts through its enforcement program rather than through formal rulemaking.  As an example, in its case against Ishan Wahi, the SEC designated nine tokens as securities.  See here

Grayscale Investments reported on May 17, 2023 that the SEC sent it a comment letter in response to the Form 10 Grayscale had filed with the SEC to register shares of the Grayscale Filecoin Trust pursuant to Section 12(g) of the Securities Exchange Act of 1934.  Grayscale had voluntarily filed a Form 10 to make its Filecoin Trust product a reporting company.

The main asset of the Filecoin Trust is the Filecoin (FIL) token.  Grayscale’s press release stated:

On May 16, 2023, Grayscale received a comment letter from the SEC staff stating its view that the Trust’s underlying asset, FIL, meets the definition of a security under the federal securities laws, and that therefore the Trust appears to meet the definition of an investment company under the Investment Company Act of 1940. The SEC staff requested that Grayscale seek withdrawal of the registration statement promptly.

Grayscale does not believe that FIL is a security under the federal securities laws and intends to respond promptly to the SEC staff with an explanation of the legal basis for Grayscale’s position. Grayscale cannot predict whether the SEC staff will be persuaded that Grayscale’s position is correct, and if not, whether it may become necessary for Grayscale to seek accommodations that would enable the Trust to register under the Investment Company Act of 1940 or, alternatively, seek dissolution of the Trust.

Grayscale is currently waiting for a decision in its lawsuit against the SEC, in the D.C. Circuit, concerning the SEC’s refusal to approve Grayscale’s spot Bitcoin ETF.  The case was argued this past March.


David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. David has been included in Chambers for his expertise in international arbitration. He is the editor of the firm's blockchain blog.