Crypto trading firm Cumberland will halt trading in the token used by the decentralized storage platform Filecoin with its over-the-counter counterparties, the firm said in an alert sent to clients on Tuesday that was reviewed by The Block.
The measure becomes effective on June 1 at 4 p.m. UTC, with the company saying that “all FIL trades entered into before that time will be settled in accordance with the usual procedures under the Master Purchase Agreement.”
The firm attributed the decision to halt OTC trading in the cryptocurrency to a precaution taken because of the “regulatory environment.” It didn’t immediately respond to a request for further comment.
Filecoin was trading down 2.7% at $4.68 with a market capitalization of just under $2 billion on Wednesday, according to CoinMarketCap.
Cumberland’s specific concerns around the trading of filecoin were not immediately made known, but the move comes at a time of increased regulatory scrutiny over crypto market participants in the U.S. and a pullback from a number of the firm’s competitors.
Earlier this month, Grayscale Investments said it received a letter from U.S. Securities and Exchange Commission asking it to withdraw the registration of a trust that would invest in filecoin because the regulator had determined the asset meets the definition of a security.
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