SEC Ends Investigation into Stacks Developer Hiro Systems: Crypto Community Rejoices!

SEC Drops Investigation into Stacks Developer Hiro Systems: A Crypto Industry Win

The crypto community is celebrating another victory as the U.S. Securities and Exchange Commission (SEC) has dropped its investigation into Hiro Systems, a developer firm crucial to the Bitcoin Layer-2 network Stacks.

This decision comes just a day after the SEC concluded its investigation into stablecoin issuer Paxos, indicating a potential shift in the SEC's approach to the crypto industry.

Hiro Systems Investigation Concluded

The SEC had been investigating Hiro Systems (formerly Blockstack) since 2017, when the company raised $70 million through token sales. The agency's probe focused on the company's Stacks blockchain, which launched its mainnet in January 2021.

Despite the three-year investigation, Hiro reportedly fully cooperated with the SEC's requests for information. On July 9th, 2024, the SEC informed Hiro that its staff had completed the investigation and would not recommend any enforcement action.

Hiro's CEO, in a statement, expressed relief and called this outcome the best possible in the current regulatory environment.

Stacks (STX) Token Price Surges

Following the news, the Stacks (STX) token, which uses a proof of transfer consensus mechanism, experienced a significant price surge. STX jumped from lows of $1.5 to above $1.70, trading around $1.69 at the time of writing, reflecting a 5% increase in the past 24 hours.

SEC's Investigation into Paxos Concluded

The SEC's decision to close the Hiro Systems investigation mirrors a similar outcome for Paxos, a US-based crypto company. The SEC had been investigating Paxos' role in issuing Binance USD (BUSD), a Binance-branded stablecoin.

After halting BUSD support in August 2023, Binance also faced scrutiny from the SEC. On July 11th, 2024, the SEC announced that it had concluded its investigation into Paxos and would not recommend any enforcement action.

These developments signal a potential shift in the SEC's approach to the crypto industry. While the agency has been actively pursuing enforcement actions against crypto companies, these recent decisions suggest a more nuanced approach might be emerging.