Bitcoin Scaling Network Stacks Avoids Charges as SEC Closes Investigation

The U.S. Securities and Exchange Commission (SEC) has ended an investigation into both Stacks—a Bitcoin scaling network—and original developer Hiro Systems, according to a filing released Friday.

“On July 9, 2024, Hiro Systems PBC (“Hiro”) was informed by the staff of the Securities and Exchange Commission (the “SEC”) that the staff concluded its investigation as to the Stacks Blockchain and that based on the information known to the staff as of that date, the staff does not intend to recommend an enforcement action by the SEC against Hiro,” the filing reads.

The investigation was opened in 2021, despite Stacks (then Blockstack) network contributors claiming that its token sale had been “SEC-qualified.” Hiro Systems hailed the SEC’s decision in a blog post Friday.

“This outcome reaffirms our commitment to striving for faithful fulfillment of regulatory compliance and meeting our mission to support developers as they build and innovate on Bitcoin,” the post reads.

The Stacks announcement follows a similar one from stablecoin issuer Paxos on Thursday, with the firm announcing that the SEC investigation into its BUSD stablecoin with crypto exchange Binance had also ended without enforcement action.

Editor’s note: This story is breaking and will be updated with additional details.