SEC Drops Three-Year Investigation into Stacks
The SEC has dropped its three-year investigation into Hiro Systems, the blockchain software developer behind Stacks (STX). The investigation, which began in September 2021, focused on whether the company’s STX token, initially classified as a security, had become sufficiently decentralized.
This news follows the SEC’s decision to drop its investigation into BUSD earlier this week, suggesting a potential shift in the SEC’s approach to crypto regulation.
A Shift in Crypto Regulation?
The SEC’s decision to close both investigations without taking action could signal a potential change in the agency’s stance on crypto. The SEC’s willingness to acknowledge the possibility of a token transitioning from a security to a decentralized asset could open doors for other projects seeking similar classification.
Stacks and STX
Stacks is a blockchain protocol that builds on top of Bitcoin. The STX token is used to secure the network and pay for transaction fees.
- In 2017-2019, STX tokens were sold as securities under SEC regulations.
- In January 2021, Hiro Systems claimed that Stacks had become fully decentralized, suggesting STX was no longer a security.
The SEC’s investigation was centered around this claim. While the SEC’s decision to drop the investigation does not necessarily mean that it agrees with Hiro’s assessment, it does suggest that the agency is willing to consider decentralized projects on a case-by-case basis.
What’s Next for Stacks?
The SEC’s decision could have significant implications for Stacks. The removal of regulatory uncertainty could encourage greater adoption and investment in the Stacks ecosystem.
It will be interesting to see how the SEC approaches future investigations into crypto projects and how this decision influences the broader cryptocurrency market.
