The SEC has closed its investigation into Hiro Systems and the Stacks blockchain without recommending any enforcement action, according to a July 12 blog post from the team.

The investigation, which began more than three years ago, has been a significant chapter in the history of the Bitcoin Layer-2 network.

STX was up 5.51% and trading at $1.7 as of press time, based on CryptoSlate data.

The investigation began 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. Shortly after, in June 2021, the SEC’s Enforcement Division launched its investigation into the blockchain and developer Hiro Systems.

Hiro’s vision has consistently focused on building the next generation of the internet, where users have unprecedented control and ownership. From its early efforts in creating the first version of the Stacks layer to its current focus on developer tools for Bitcoin builders, this mission has remained unwavering.

For over three years, Hiro diligently complied with all requests for information, striving to explain the workings of the Stacks network and Hiro’s role within it. Muneeb Ali, who serves on the board of Hiro Systems, highlighted the effort put into cooperating with the SEC.

Ali said:

“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. We need a regulatory system that meets builders of innovative open protocols where they are.”

On July 9, Hiro was informed by the SEC staff that the investigation was concluded and no enforcement action would be recommended. In light of the current regulatory environment in the US, this outcome is viewed as highly favorable for companies in the blockchain space.

According to the blog:

“This outcome reaffirms our commitment to regulatory compliance and our mission to support developers building and innovating on Bitcoin. We have evolved our developer tools significantly, now covering Ordinals, BRC-20s, Runes, Stacks, and soon, the new sBTC Bitcoin asset.”

The team emphasized their belief in the importance of creating a clear regulatory framework in the US and expressed hope for continued opportunities to shape policies that support the builders of innovative open protocols.

The closure of the SEC investigation is seen as a positive sign for the future of Bitcoin and the next generation of the internet, bolstering Hiro’s commitment to its mission and the broader Stacks ecosystem.