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SEC Terminates Investigation Into Bitcoin (BTC) Layer-2 Stacks Developer Hiro

July 12, 2024

The U.S. Securities and Exchange Commission (SEC) is dropping its investigation into the firm behind the popular Bitcoin (BTC) layer-2 chain Stacks (STX).

According to a new Form 1-U filing from the SEC, the securities regulator has investigated STX-developer Hiro and decided not to pursue any further actions against the crypto firm.

“Termination of SEC Investigation

On July 9, 2024, Hiro Systems PBC (‘Hiro’) was informed by the staff of the Securities and Exchange Commission (the ‘SEC’) that the staff concluded its investigation as to the Stacks Blockchain and that based on the information known to the staff as of that date, the staff does not intend to recommend an enforcement action by the SEC against Hiro.”

This concludes a three-year investigation by the SEC into Hiro, which was formerly known as Blockstack. The firm raised approximately $70 million in token sales from 2017 to 2019.

According to a letter attached to the decision, the SEC is not ruling out the possibility of litigation against Hiro in the future.

“We are providing this notice under the guidelines set out in the final paragraph of Securities Act Release No. 5310, which states in part that the notice ‘must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff’s investigation.'”

The announcement is largely being received as another win for the crypto industry.

In similar news, the SEC announced yesterday that it was dropping its investigation into BUSD stablecoin issuer Paxos.

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