Regulation
SEC vs. Crypto – Back-to-back wins for the crypto ecosystem
Everyone knows about the SEC vs. Crypto fight. It has been years since the SEC decided to go after various crypto organizations and their tokens. One such case, almost forgotten by the community, is that of SEC vs. Blockstack, a blockchain software development company.
The U.S. Securities and Exchange Commission (SEC) has given the cryptocurrency industry another reason to celebrate. On July 12, the SEC concluded a three-year investigation into Hiro Systems. Hiro Systems is a blockchain software developer formerly known as Blockstack. The SEC decided not to pursue charges. This news came just a day after the SEC ended its investigation into Paxos stablecoin issuerThis is a major victory for the crypto community. This is the second investigation dropped by the SEC in two consecutive days.
Hiro Systems Investigation Completed
Hiro Systems raised $70 million in token sales between 2017 and 2019 and launched the Stacks mainnet in January 2021. Stacks is a layer-2 blockchain that improves on Bitcoin, allowing developers to build decentralized applications. Despite early scrutiny from the SEC, Hiro has claimed that the network has become fully decentralized in 2021. This change came with the introduction of a new consensus mechanism called proof of transfer. As a result, the company stopped treating Stacks tokens as securities. This decision has been a point of contention with the SEC.
The Happy Tweet About Cryptocurrencies
In a tweet posted Friday, Muneeb Ali, the creator of the Stacks protocol and current CEO of Trust Machines, confirmed that the SEC’s investigation is focusing on the Stacks protocol, not just Hiro Systems.
Source: X (formerly Twitter)
The conclusion of the investigation came as a relief to Hiro, which had been under regulatory pressure since September 2021. In a public statement, Hiro expressed optimism about the development, highlighting it as the best possible outcome given the current regulatory climate in the United States.
Impact on STX token
The announcement that the SEC has dropped its investigation has had a positive impact on the Stacks token (STX). Following this announcement, the price of STX has increased from $1.50 to over $1.70, an increase of 5% in 24 hours. This increase indicates renewed investor confidence in the token and the broader Stacks ecosystem.
Source: TradingView
SEC Terminates Investigation into Paxos
As noted above, the conclusion of the SEC’s investigation into Hiro Systems comes just a day after a similar outcome was announced for Paxos. The investigation into the U.S.-based crypto company involved Binance USD (BUSD), a Binance-branded stablecoin issued by Paxos. Binance discontinued support for BUSD in August 2023 amid the SEC’s investigation.
On Thursday, July 11, 2024, the SEC announced that it had concluded its investigation and would not pursue any enforcement action. “We have concluded the investigation regarding Paxos Trust Company, LLC. Based on the information available to us to date, we do not intend to recommend that the Commission take enforcement action against Paxos,” the SEC wrote.
Looking forward
These consecutive decisions by the SEC to drop investigations into Hiro Systems and Paxos are considered significant victories for the crypto industry. They suggest a possible shift in the SEC’s approach to cryptocurrency regulation and enforcement. With the regulatory environment remaining a crucial factor for the cryptocurrency market, these developments are likely to boost investor sentiment and confidence in the future of the industry. Furthermore, it appears that in the SEC vs Crypto series, crypto is leading the charge. sure victory.