SEC Drops Investigation into Stacks and Hiro Systems
The US Securities and Exchange Commission (SEC) has closed its three-year investigation into Stacks, the layer 2 network built on top of Bitcoin, and its developer Hiro Systems. The SEC decided not to pursue enforcement action against the company.
The investigation focused on whether Stacks tokens sold in early offerings were securities. Hiro Systems transitioned the Stacks network to a new version with an updated consensus mechanism in 2021, claiming that the STX tokens were no longer securities. The SEC launched an investigation to determine the validity of the claim.
Muneeb Ali, Stacks’ co-creator, expressed relief that the investigation was over but believes the US needs a better system for regulating the crypto industry.
This decision comes after the SEC also closed its investigation into Paxos, with no securities charges filed against BUSD, a Paxos-issued stablecoin.
Despite these recent wins for the crypto industry, the SEC still has ongoing legal battles with crypto exchanges and infrastructure builders. The SEC is currently pursuing lawsuits against major crypto exchanges like Coinbase, Binance, and Kraken. Blockchain infrastructure builders such as Consensys and Uniswap Labs also remain targets of the regulator.
- The SEC has been investigating Stacks and Hiro Systems for three years.
- The SEC has closed the investigation and will not pursue enforcement action.
- The SEC also closed its investigation into Paxos.
- The SEC is still pursuing lawsuits against major crypto exchanges and infrastructure builders.
