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Open-source R&D Lab Protocol Labs has defended Filecoin with respect to the SEC’s statements, saying that the FIL token is not a security.
Filecoin developer Protocol Labs published a lengthy Twitter thread on June 9, stating that Filecoin was not a security. It offered several reasons for this, amid the United States Securities and Exchange Commission’s (SEC) claims that the token was a security.
Protocol Labs Defends Filecoin
Earlier, the SEC had said that Filecoin (FIL) was a security after Grayscale had applied for a Filecoin Trust investment product. The latter had to withdraw its application, as a comment letter sent by the SEC stated that the FIL token “met the definition of a security.” Recently, the SEC has named several cryptocurrencies as securities in connection with the Binance and Coinbase lawsuits.
The statement from Protocol Labs comes as the SEC files cases against Binance and Coinbase for various reasons. While these cases won’t have a particular impact on Filecoin’s decentralized storage solution, they will have a far-reaching consequence on the future of the market and tokens like FIL should it go the wrong way.
FIL Down 15% Since the SEC Lawsuit
The Filecoin token has dropped by over 15% since the SEC charged Binance and Coinbase. It is not the only token that the SEC thinks is a security, and the market has generally dropped considerably since the lawsuits were filed. It is currently trading for around $4.08.
FIL’s price also dropped when the SEC letter to Grayscale was made public. Back then, it dropped from $6.1 to $5.2, which is about 14%. Other tokens that have been labeled securities have also seen price drops since the SEC began its crusade.
Filecoin Having a Rollercoaster Year
Filecoin has been experiencing a lot of changes in 2023. In February, it cut 21% of its staff as the crypto winter took hold. Employees received enhanced severance packages, but it was harsh nonetheless.
More recently, Protocol Labs partnered with a16z crypto to support Crypto Startup School (CSS) accelerator program. The latter is an accelerator program that helps web3 startups get off of the ground through mentorship and other resources.