- Grayscale said cryptocurrencies XLM, ZEC, and ZEN may be securities.
- Grayscale made the comments in an SEC filing answering queries.
- Grayscale might be a victim of Ethereum’s Merge.
According to recent SEC filings made by the cryptocurrency investing business Grayscale, Zcash (ZEC), Horizen (ZEN), and Stellar (XLM) may presently be considered securities, according to the fact that they actually exist today.
Grayscale said in the filings that it was responding to SEC personnel from the Division of Corporate Finance and Enforcement, which is the investigative department of the Commission that has been gradually increasing its focus on regulating cryptocurrency.
Since ZEC, ZEN, and XLM only account for a combined total of $40 million of Grayscale’s approximately $18.7 billion in assets under management from funds and trusts, these cryptocurrencies are only outliers in an empire that was once far more expansive. Before its value fell along with the rest of the cryptocurrency markets in November, Grayscale had around $60 billion worth of assets when the market was at its highest.
In related developments, Grayscale, which is presently collecting a market valuation of $142.82 billion, may become an unintentional victim as a result of Ethereum’s switch to a proof-of-stake system, also known as the Merge, according to a report that was recently published by the blockchain analytics site DappRadar.
The DappRadar report reads:
Grayscale voiced concerns over the potential impact on the Merge, especially on tokens that run natively on Ethereum. The crypto investment firm believes the Merge may lead to a fork that might have unexpected and unfavorable outcomes.
The possibility that stablecoins and tokens locked in smart contracts may no longer be redeemable is one of the concerns raised by Grayscale about the Merge.