- Protocol Labs has publicly refuted SEC’s claim that Filecoin, their decentralized storage solution, is a security.
- Filecoin’s market value has seen a decline since the SEC’s security classification and the ongoing lawsuits against Binance and Coinbase.
Protocol Labs, the mastermind behind Filecoin, has adamantly dismissed the United States Securities and Exchange Commission’s (SEC) assertion that Filecoin is a security.
In a detailed discourse published on Twitter on June 9, the open-source R&D Lab Protocol Labs reinforced their belief that Filecoin does not qualify as a security. This response follows SEC’s previous assertion that Filecoin (FIL) fits the definition of a security.
Major achievement unlocked! 🙌
We're thrilled to announce that #Filecoin has reached an incredible milestone, storing 1 EiB of data. 📈 Be part of the celebration!
— Filecoin News (@Filecoin) June 7, 2023
Earlier, SEC made the security designation in response to Grayscale’s application for a Filecoin Trust investment product. This led to Grayscale withdrawing its application after the SEC’s comment letter pinpointed the FIL token as meeting the criteria of a security. The SEC has recently also identified several other cryptocurrencies as securities amidst lawsuits involving major players Binance and Coinbase.
This clarification from Protocol Labs occurs as the SEC engages in legal battles with Binance and Coinbase. Though these ongoing cases do not directly affect Filecoin’s decentralized storage service, they could significantly influence the future market trajectory and tokens like FIL.
Since the SEC initiated charges against Binance and Coinbase, Filecoin’s token has depreciated by over 15%. This depreciation reflects the wider market trend following these lawsuits. At present, FIL is trading around $4.08.
Notably, FIL’s price experienced a similar downward trajectory when SEC’s letter to Grayscale became public, declining from $6.1 to $5.2, a roughly 14% drop. A similar pattern has been observed with other tokens labeled as securities amidst the SEC’s stringent approach.
2023 has been a year of significant shifts for Filecoin. It started with a reduction of 21% of its workforce in February due to the onset of a crypto winter. Despite the enhanced severance packages, the layoffs left a sting.
However, Protocol Labs continues to make strides forward, demonstrated by its recent partnership with a16z crypto. Together, they support the Crypto Startup School (CSS) accelerator program, providing mentorship and resources to budding web3 startups, illustrating their commitment to foster the growth of the crypto ecosystem.