Filecoin (FIL) Barely Moves After SEC Tells Grayscale Token Is Security

The SEC sent Grayscale a comment letter.

Gery Gensler kicking a Filecoin into pieces.
Created by Gabor Kovacs from DailyCoin
  • The U.S. SEC sent Grayscale a comment letter saying the company is selling FIL, an unregistered security.
  • Grayscale responded to the SEC explaining why FIL is not a security.
  • FIL had an interesting reaction to the SECโ€™s comments.

The current crypto bear market is one of the industry’s toughest. And not only because digital asset prices remain suppressed.

Another reason for the severity of the bear market is the tough regulatory environment, especially in the U.S. For example, Grayscale just received a letter from the SEC implying that the fund sells unregistered securities.

SEC Thinks FIL Is Security

FIL, the largest decentralized storage protocol Filecoinโ€™s native currency, is a security.

Sponsored

Thatโ€™s at least what the U.S. Securities and Exchange Commission (SEC) thinks. On Wednesday, Grayscale, a digital asset manager, said it received a comment letter from the SEC claiming that the company is selling unregistered securities, including FIL.

Grayscale also added that the SEC โ€œrequested that Grayscale seek withdrawal of the registration statement promptly.โ€

However, Grayscale disagreed with the SECโ€™s comments. The company believes that FIL isnโ€™t a security โ€œunder the federal securities lawsโ€ and intends to respond to the SEC by explaining why.

At the same time, Grayscale admitted that itโ€™s unable to predict whether the SEC will agree with the companyโ€™s response.

โ€œGrayscale cannot predict whether the SEC staff will be persuaded that Grayscaleโ€™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.โ€

FIL, on the other hand, had no material reaction to the SECโ€™s comments.

Filecoin (FIL) Price Remains Unchanged After SEC Comments

Filecoinโ€™s FIL, which the SEC believes is a security and shouldโ€™ve registered with the agency, reacted fairly to the SECโ€™s comments.

FIL is currently trading at $4.50, up 1.9% on the day, according to data from CoinGecko. FIL is down over 98% from its all-time high of $236.84.

FIL has a market cap of $1.91 billion and is the 33rd largest cryptocurrency in the industry. 

On the Flipside

  • The SECโ€™s comments donโ€™t mean the agency will file an enforcement action against Grayscale.

Why This Matters

The SEC has been waging a war against the cryptocurrency industry. If the SEC officially deems FIL and other cryptocurrencies securities, the whole industry might suffer a terrible blow.

Read more about potential SEC involvement in Coinbaseโ€™s decision to halt ETH reward withdrawals:

Coinbase Halts ETH Staking Reward Withdrawals: Is SEC Action Related?

Read more about what Polygon co-founderโ€™s web3 fellowship program offers:

What Polygon Co-Founderโ€™s New Web3 Fellowship Program Offers

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Arturas Skur

Arturas Skur is a cryptocurrency news reporter at DailyCoin who covers Web 3.0 domains, DeFi, and Ethereum Layer-2s. With over five years of experience in journalism and public relations, Arturas brings his critical thinking and analytical abilities to deliver insightful news stories. In his free time, he enjoys hiking, playing with his dog, and reading.

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