The Digital Chamber, in collaboration with Willkie Farr & Gallagher LLP, recently released a joint whitepaper arguing that Filecoin (FIL) should not be regulated by the U.S. Securities and Exchange Commission (SEC). The organization's announcement came in a June 21 blog post.
According to the whitepaper, the SEC’s attempts to label FIL as an investment contract are "misguided" and call for clear regulatory guidance to enhance industry confidence and facilitate the adoption of blockchain technologies. The labeling of FIL’s regulatory status is significant because it provides legal clarity for crypto assets and how decentralized cryptocurrencies are treated under securities laws. The Digital Chamber states that classifying FIL and other tokens as securities could stifle innovation and development within the blockchain sectors, affecting investor protection and market access.
Filecoin is described as "a peer-to-peer network that stores files, with built-in economic incentives and cryptography to ensure files are stored reliably over time," according to Filecoin Docs. Users pay to store their files on computers known as storage providers, who must prove they have stored users’ files correctly from the start of storage. Individuals who want to store their files or get paid for storing others’ files can join Filecoin. "Available storage, and the price of that storage, are not controlled by any single company. Instead, Filecoin facilitates open markets for storing and retrieving files that anyone can participate in," according to Filecoin Docs.
Regarding its regulation as an investment contract, The Digital Chamber says that cryptocurrency assets are "not expressly incorporated" into the definitions for "securities" according to US federal securities laws. The SEC says that cryptocurrency asset issuers and intermediaries could be forced to register their offers and sales "to the extent that such transactions satisfy the definition of an investment contract," under the Howey test. The Digital Chamber opines that pure purchases of FIL for personal use do not satisfy the Howey test; therefore, FIL purchases are not securities.
The Digital Chamber promotes the acceptance and use of digital assets and blockchain-based technologies. It provides education and advocacy services, working with policymakers, industry leaders, and regulatory agencies.
