SEC drops probe into Stacks blockchain and developer Hiro Systems

The US Securities and Exchange Commission dropped a three-year investigation into the Stacks blockchain and its developer Hiro Systems, according to a Friday court filing accompanied by a letter.

Hiro, formerly known as Blockstack, raised $70 million from token sales from 2017 to 2019. Hiro developed the Stacks chain with its token STX in 2018.

Hiro spent 10 months and $2 million on lawyer fees to get its security token registered with the SEC, DL News reported earlier, citing co-founder Muneeb Ali.

Ali said the Stacks ecosystem had then decentralised before the mainnet launch in January of 2021, and Hiro notified the SEC it was no longer providing “essential managerial services to the Stacks Blockchain,” so it was no longer necessary for the company to treat Stacks tokens as securities.

Within a few months the SEC began its investigation.

Ali said Friday in a post on X that “we received word from the SEC that after 3 years, they are terminating their investigation into the Stacks blockchain (the protocol) and Hiro System (a company) with no action.”

He added: “We’re pleased that the SEC dropped the investigation after this time and effort. This is the best outcome a company in our industry could ask for, but the US can do better.”