Latest News

After an SEC inquiry, Grayscale claims that XLM, ZEC, and ZEN may constitute securities

The native cryptocurrencies of Horizen (ZEN), Zcash (ZEC), and Stellar (XLM) may constitute securities, according to recent filings by the crypto asset management company. Regarding the company’s crypto trusts, Grayscale was responding to inquiries from the U.S. Securities and Exchange Commission (SEC).

Grayscale originally acknowledged that ZEC, ZEN, and XLM “may currently be a security, based on the facts as they exist now” in its application in August, according to a report from Coindesk.

The digital asset management said in its filings from May and June that the SEC “had not offered any guidance as to the security status of” the three cryptocurrencies; this statement was left out of the filings from August 16.

If the SEC finds that these three cryptocurrencies are securities, Grayscale may suspend its trusts involving them because the trust industry operates on the assumption that cryptocurrencies are not securities.

Out of Grayscale’s approximately US$18.7 billion assets under management from funds and trusts, ZEC, ZEN, and XLM account for about US$40 million.

The legal ambiguity surrounding some cryptocurrencies regarding whether they should be treated as securities or merely virtual currencies is also highlighted by the continuing legal dispute between Ripple Labs and the SEC.

Using their brokerage accounts, investors can buy bitcoin investment opportunities through Grayscale’s trusts.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.