Is Filecoin [FIL] the latest to be on the US SEC radar?

• An SEC staff told Grayscale that Filecoin [FIL] could be classified as a security
• Grayscale stated it would respond to the staff but is unsure about its results

The United States Securities and Exchange Commission (SEC) continues to take action in the cryptocurrency market. According to a press release by Grayscale Investment, the latest victim of regulatory scrutiny in the US could be Filecoin [FIL]. The company got an insight from the regulator after it had filed for an application to launch Filecoin (FIL) Trust Product.

Realistic or not, here’s FIL’s market cap in BTC terms

Is Filecoin a security?

The company stated that it received a letter from an SEC staff on 16 May 2023. The letter asked Grayscale Investments to withdraw the application for the launch of the product as it could be deemed as a security. However, the company does not agree with the regulatory authority and stated that it would send out a response to the SEC staff.

Furthermore, Grayscale stated that the outcome of the response was uncertain. And, this could either result in the firm taking some other action or discarding Filecoin Trust Product.

The press release read,

“Grayscale received a comment letter from the SEC staff stating its view that the Trust’s underlying asset, FIL, meets the definition of a security under the federal securities laws, and that therefore the Trust appears to meet the definition of an investment company under the Investment Company Act of 1940.”

The price of the Filecoin token did not seem to have taken a big hit from the latest developments. According to CoinMarketCap, at press time, FIL was trading at $4.50 with a market cap of over $1 billion. The coin had registered a downward movement by just over 2 percent in the past hour and by over 3 percent in the last seven days.

Notably, this action comes right when Coinbase, a leading American crypto exchange, is trying to seek more regulatory clarity from the SEC. The exchange went as far as filing a mandamus petition seeking clear guidelines for crypto exchanges. However, the SEC refused to meet such demands claiming that the changes “takes time—including, as here, time to weigh whether or not to initiate a rulemaking proceeding about such topics in the first instance”