The U.S. Securities and Exchange Commission (SEC) asked Grayscale Investments to withdraw a Form 10 application form, the digital asset firm revealed in an announcement on Wednesday.

Last month, Grayscale voluntarily filed a Form 10 application with regards to its Filecoin Trust product in order to make it a reporting entity. On May 16, Grayscale said it received a letter from the SEC, where the regulator said that Filecoin meets the definition of a security under federal laws. 

In the SEC’s view, Form 10 would make Grayscale’s Filecoin Trust more like a public company that would be required to publish quarterly financial reports.

“Grayscale does not believe that FIL is a security under the federal securities laws and intends to respond promptly to the SEC staff with an explanation of the legal basis for Grayscale’s position,” said Grayscale in a statement.

The digital asset investment firm noted that it cannot predict whether the SEC staff will see it their way, and in the event that the regulator is not persuaded, it may become necessary to register the Filecoin Trust under the Investment Company Act of 1940 or seek its dissolution. 

Filecoin is a blockchain-based decentralized storage network and transactions are made using its native token FIL. Users of the blockchain pay for data storage using the token and miners use it as collateral for providing network consensus.

This isn’t the first time the SEC has issued a seemingly arbitrary judgment on whether a token is a security, with the regulator bringing a number of enforcement actions against crypto firms for alleged unregistered securities offerings over the past few months.

In April, the SEC deemed Dash (DASH), Algorand (ALGO), OMG Network (OMG) and three other tokens to be securities in a lawsuit against crypto exchange Bittrex. Most recently, the regulator commented on Voyager’s recently approved liquidation plan, saying that it does not object to the procedures, but its response should not be considered a determination that the liquidation does not involve the sale of securities.

“The SEC staff is of the view that the crypto assets at issue here include securities that were offered and sold without a registration statement,” stated the SEC.