The U.S. Securities and Exchange Commission announced that it was ending its three-year investigation into Hiro Systems, a blockchain software company that raised $70 million in token sales between 2017 and 2019 in a filing on Friday. The probe’s conclusion marks another victory for the cryptocurrency sector in its protracted battle with the government.
In a filing made public on July 12th, the SEC’s Division of Enforcement wrote to Hiro, “Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against Hiro Systems PBC, formerly known as Blockstack PBC.”
The SEC’s division of enforcement sent a letter to Hiro containing a boilerplate caveat that such 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.”
Hiro provides developers with tools to build applications using Stacks, a layer-2 blockchain that serves as an addition to Bitcoin. Muneeb Ali, a veteran of the cryptocurrency sector and current CEO of Trust Machines, another ecosystem builder, and board member at Hiro, is the creator of Stacks.
Ali tweeted on Friday that the SEC’s investigation included the Stacks protocol as well as the Hiro company after the filing was made public.
Ali voiced optimism for improved legal frameworks to encourage decentralized technology innovation. He said, “The closing of the Stacks investigation gives us hope for a bright future for decentralized technologies for Bitcoin and the next-generation internet.”
In 2019, Hiro, formerly known as Blockstack, collaborated with the SEC to carry out a $50 million token offering within the SEC’s Regulation A+ framework. Regulation A, which exempts small issues from registration, has been modified. The 2015 rule was amended with Regulation A+, raising the annual offering cap to $50 million.
The SEC ended its inquiry into Paxos regarding Binance USD (BUSD) with a formal termination notice on July 9, stating no enforcement actions would be proposed.
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