The SEC has closed its investigation into Hiro Systems and the Stacks blockchain without recommending any enforcement action, according to a July 12 blog post from the team.
The research, which began more than three years ago, was an important chapter in the history of the Bitcoin Layer-2 network.
STX rose 5.51% to trade at $1.7 at the time of writing, based on CryptoSlate data.
The investigation began after Stacks’ first-ever SEC qualified offering in 2019. The Stacks ecosystem has been decentralized since the launch of its mainnet in January 2021. Shortly thereafter, in June 2021, the SEC’s Enforcement Division launched its investigation into the blockchain and developer Hiro Systems.
Hiro’s vision has been consistently focused on building the next generation of the Internet, where users have unprecedented control and ownership. From the early efforts in creating the first version of the Stacks layer to the current focus on developer tools for Bitcoin builders, this mission has remained steadfast.
For over three years, Hiro diligently complied with all requests for information, striving to explain the inner workings of the Stacks network and Hiro’s role in it. Muneeb Ali, member of the board of directors of Hiro Systems, highlighted the efforts made to cooperate with the SEC.
Ali said:
“We are pleased that the SEC has dropped the investigation after this time and effort. This is the best outcome a company in our industry can hope for, but the US can do better. We need a regulatory system that meets builders of innovative open protocols where they are.”
On July 9, Hiro was informed by SEC staff that the investigation had concluded and that no enforcement action would be recommended. In light of the current regulatory environment in the US, this outcome is considered very favorable for companies in the blockchain space.
According to the blog:
“This outcome reaffirms our commitment to regulatory compliance and our mission to support developers building and innovating on Bitcoin. We have significantly developed our developer tools and now include Ordinals, BRC-20s, Runes, Stacks and soon the new sBTC Bitcoin assets.”
The team emphasized their belief in the importance of creating a clear regulatory framework in the US and expressed hope for continued opportunities to shape policies that support the builders of innovative open protocols.
The conclusion of the SEC investigation is seen as a positive sign for the future of Bitcoin and the next generation of the internet, reinforcing Hiro’s commitment to his mission and the broader Stacks ecosystem.