The U.S. Securities and Exchange Commission (SEC) has wrapped up its investigation into Stacks, a Bitcoin scaling network, and its original developer Hiro Systems, opting not to pursue any enforcement actions. This decision, disclosed in a filing released on Friday, marks the culmination of an inquiry initiated in 2021.
In the filing, Hiro Systems PBC was notified on July 9, 2024, by the SEC staff that the investigation concerning the Stacks Blockchain had concluded. Based on the information available to them, the SEC staff indicated they do not intend to recommend enforcement action against Hiro.
For Hiro Systems, this closure brings significant relief after enduring scrutiny despite assertions from contributors within the Stacks network that their token sale had been “SEC-qualified.” Hiro Systems underscored its commitment to regulatory compliance and support for developers innovating on the Bitcoin platform in a recent blog post.
“This outcome reaffirms our dedication to achieving regulatory compliance and fulfilling our mission to empower developers as they build and innovate on Bitcoin. Above all, we remain committed to serving the developer community, and our tools have expanded over the years to encompass Ordinals, BRC-20s, Runes, Stacks, and soon, the new sBTC Bitcoin asset,” the blog post stated.
While the SEC’s decision is a positive outcome for Hiro Systems, the investigative process has been strenuous and costly. According to a source familiar with the matter, the three-year-long investigation incurred significant expenses, surpassing seven figures annually. The source described the process as “insanely expensive” and “super invasive,” characterizing interactions with the SEC as challenging and often unyielding.
The conclusion of the SEC’s investigation marks a milestone for Hiro Systems, allowing them to focus on advancing their technologies and supporting developers within the Bitcoin ecosystem amid a backdrop of stringent regulatory oversight.
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