Recently, the Securities and Exchange Commission (SEC) concluded its investigation into Hiro Systems and the Stacks blockchain without recommending any enforcement action. This investigation, which spanned over three years, has been a crucial chapter in the history of the Bitcoin Layer-2 network. The SEC probe started following the first-ever SEC-qualified offering by Stacks in 2019. The Stacks ecosystem has been decentralized since before the mainnet launch in January 2021. In June of 2021, the SEC’s Enforcement Division initiated the investigation into the blockchain and developer Hiro Systems.
Throughout the investigation, Hiro Systems diligently complied with all requests for information, aiming to clarify the inner workings of the Stacks network and Hiro’s role within it. Muneeb Ali, who is a board member of Hiro Systems, highlighted the company’s efforts to cooperate with the SEC. Ali expressed satisfaction with the SEC dropping the investigation after significant time and effort. Despite the positive outcome, Ali believes that there is room for improvement in the US regulatory system to better support builders of innovative open protocols.
On July 9, the SEC informed Hiro Systems that the investigation was concluded, and no enforcement action would be recommended. This news was well-received by the team, particularly in the current regulatory environment in the US. The outcome reaffirms Hiro’s commitment to regulatory compliance and its mission to assist developers in building and innovating on Bitcoin. The team has significantly enhanced its developer tools, now encompassing Ordinals, BRC-20s, Runes, Stacks, and soon, the new sBTC Bitcoin asset.
The Hiro Systems team stressed the significance of establishing a clear regulatory framework in the US and expressed optimism for ongoing opportunities to influence policies that support innovative open protocols. The conclusion of the SEC investigation is viewed as a positive signal for the future of Bitcoin and the next generation of the internet, reinforcing Hiro’s dedication to its mission and the broader Stacks ecosystem.