The U.S. Securities and Exchange Commission has dropped a three-year-old investigation into Hiro Systems, a blockchain software developer that raised $70 million in token sales from 2017 to 2019. This news comes as a relief to the crypto industry, which has been in a long-standing battle with the regulator.
The SEC’s division of enforcement stated in a letter attached to a Friday filing that they do not intend to recommend an enforcement action against Hiro Systems PBC, formerly known as Blockstack PBC. However, they also included a disclaimer that this decision does not exonerate the company and further action may still be taken.
Hiro Systems, founded by crypto industry veteran Muneeb Ali, develops tools for developers to build apps on Stacks, a layer-2 blockchain that works alongside Bitcoin. The company initially treated the tokens it sold as securities but later transitioned to a new version of Stacks in January 2021, claiming the network had become fully decentralized.
The SEC’s probe into Hiro Systems also looked into the Stacks protocol, not just the company itself. This investigation has now come to a close, providing a sense of relief for the firm and removing a looming threat.
Overall, this development is seen as a positive outcome for Hiro Systems and the broader crypto industry, as they continue to navigate regulatory challenges and strive for innovation in the blockchain space.