Bitrabo Editorial
The US Securities and Exchange Commission (SEC) has wrapped up its three-year investigation into Bitcoin Layer 2 (L2) blockchain Stacks (STX) and Hiro Systems without taking any action.
SEC Concludes Probe into Stacks
Muneeb Ali, one of the creators of the Stacks protocol, shared on social media the news of the SEC investigation coming to an end. He expressed satisfaction with the outcome and mentioned that after providing all the required information and detailing the operations of the Stacks network and Hiro’s role as a developer tooling company, the SEC decided to close the investigation.
We’re happy that the SEC has decided to close the investigation after this time and effort. This is the best scenario for a company like ours in the industry, but there is room for improvement in the US regulatory system. We will continue to collaborate with policymakers and developers to work towards this goal. The conclusion of the Stacks investigation fills us with hope for a promising future for decentralized technologies in the realms of Bitcoin and the next-generation internet.
This development serves as another setback for the regulator, following a recent case closure involving brokerage firm Paxos after a year-long investigation on Binance’s BUSD stablecoin, which a court determined was not a security under the SEC’s Howey test.
No Guarantee of Future Action or Exoneration
In a letter dated July 9, the SEC informed the Stacks protocol that the investigation had concluded, and no enforcement action was planned against Hiro Systems, formerly known as Blockstack.
However, the SEC clarified that this notice should not be seen as exoneration or a promise that no action may arise as a result of the staff’s investigation. The letter mentioned:
We are issuing this notice as per the guidelines of Securities Act Release No. 5310, indicating that the party has not been exonerated and that action may still arise from the staff’s investigation.
Hiro Systems, in a blog post summarizing the events of the past year, explained that the SEC’s Enforcement Division began investigating Hiro and the Stacks blockchain in January 2021. The firm complied with information requests and clarified the roles of the Stacks network and Hiro’s involvement.
Our commitment to empowering developers is why we still strongly believe in the necessity for a clear regulatory framework in the US and eagerly anticipate further opportunities to contribute to shaping policies for innovative open protocol developers. The conclusion of the investigation into Hiro and Stacks inspires hope for a bright future for Bitcoin and the future of the internet.
The native token of Stacks, STX, is currently trading at $1.68, experiencing a 5% surge in the 24-hour timeframe following the favorable outcome against the US SEC.
Image source: DALL-E, chart from TradingView.com