Controversial 3-Year SEC Investigation Into Bitcoin L2 Stacks Concludes With No Charges

The US Securities and Change Fee (SEC) has concluded its three-year investigation into Bitcoin Layer 2 (L2) blockchain Stacks (STX) and Hiro Programs with out taking any motion. 

SEC Ends Probe Into Stacks

Muneeb Ali, co-creator of the Stacks protocol, introduced the termination of the SEC investigation by a social media publish on Friday, expressing satisfaction with the result and stating that after offering all requested info and explaining the workings of the Stacks community and Hiro’s function as a developer tooling firm, the SEC determined to drop the investigation. Ali said:

We’re happy that the SEC dropped the investigation after this effort and time. That is the perfect end result an organization in our business may ask for, however the US can do higher. We want a regulatory system that meets builders of progressive open protocols the place they’re. We’ll proceed working with policymakers and builders to assist make this occur. The closing of the Stacks investigation provides us hope for a vibrant future for decentralized applied sciences for Bitcoin and the next-generation web. 

This growth marks one other setback for the regulator after it lately dropped one other case towards brokerage agency Paxos after a year-long investigation involving Binance’s BUSD stablecoin, which a court docket finally dominated was not a safety beneath the SEC’s Howey check.

No Exoneration Or Assure Of Future Motion

The SEC, in a letter dated July 9, knowledgeable the Stacks protocol that it had concluded the investigation and didn’t intend to suggest any enforcement motion towards Hiro Programs, previously often known as Blockstack. 

Nonetheless, the SEC clarified that the discover shouldn’t be interpreted as a dismissal or a assure that no motion could end result from the workers’s investigation. The letter additional reads:

We’re offering this discover beneath the rules set out within the ultimate paragraph of Securities Act Launch No. 5310, which states partly that the discover “should on no account be construed as indicating that the social gathering has been exonerated or that no motion could finally end result from the workers’s investigation.

Hiro Programs, in a weblog publish summarizing the occasions of the previous yr, said that the SEC’s Enforcement Division initiated an investigation into Hiro and the Stacks blockchain in January 2021, for which the agency complied with info requests and clarified the function of the Stacks community and Hiro’s involvement. The weblog publish famous:

Our perception in enabling builders can be why we nonetheless consider strongly in the necessity to create a transparent path and regulatory framework within the US, and we stay up for continued alternatives to assist form coverage to fulfill builders of progressive open protocols the place they’re. The closing of the Hiro and Stacks investigation provides us hope for a vibrant future for Bitcoin and the following technology of the web.

Stacks’ native token STX is buying and selling at $1.68, surging over 5% within the 24-hour time-frame following the regulatory victory towards the US SEC. 

Featured picture from DALL-E, chart from TradingView.com