Stacks protocol SEC inquiry ends after three years
The SEC ended its Bitcoin Layer 2 network Stacks inquiry.
In 2021, SEC started studying Hiro Systems and Stacks protocol following its decentralization.
STX is up almost 5% after the news.
STX rose more than 5% on Friday as the SEC discontinued a three-year inquiry against Hiro Systems and its Bitcoin Layer 2 technology Stacks.
Hiro Systems PCB, makers of Bitcoin Layer-2 protocol Stacks, said that the SEC has ended its inquiry into the firm and protocol, with no plans to take legal action against them. The corporation got the notification this week along with a Friday SEC filing.
After suspecting STX was offered as a security, the SEC examined Stacks and Hiro Systems for three years. After STX's debut in 2018, the business marketed the tokens as securities under SEC Regulation A+. Hiro raised about $20 million from STX sales under the regulation's restricted public offering without full registration.
Stacks became completely decentralized in 2021 after updating its protocol. This prompted the SEC to investigate Stacks in June. In the inquiry, Hiro Systems said it supplied all the necessary information.
"For 3+ years, we have provided all requested information and worked to explain how the Stacks network works, and Hiro's role as a developer tooling company," stated Ali.
Since the SEC has dropped other crypto investigations in recent months, many crypto community members saw the termination of the Stacks inquiry as a huge success for the crypto sector. After receiving a "formal termination notice" on July 9, Paxos Labs' BUSD coin was cleared by the SEC.
STX surged 5% as the SEC ended its probe.
