Stacks (STX) surged nearly 9% after the U.S. SEC concluded a three-year investigation into Hiro Systems, formerly Blockstack. The SEC had been examining the company due to $70 million raised in token sales between 2017 and 2019.
This decision, revealed in a Friday filing, marks a significant victory for the crypto sector. The SEC’s division of enforcement communicated that it does not plan to recommend enforcement action against Hiro Systems based on current information.
This development follows another favorable regulatory outcome, where the SEC also concluded its investigation into stablecoin issuer Paxos without recommending action. These back-to-back decisions suggest a potential regulatory shift, boosting market sentiment.
Hiro Systems plays a crucial role in the blockchain ecosystem, developing tools for decentralized applications on Stacks, a layer-2 blockchain enhancing Bitcoin. The Stacks project aims to leverage Bitcoin’s security for smart contracts and applications.
The resolution of the SEC probe has removed significant uncertainty, allowing Hiro to focus on innovation. The market reacted quickly, with STX price climbing over 9% in one hour and 4.54% in 24 hours, reaching $1.71 with a market cap of $2.51 billion.
This outcome is strategically important, as it clears regulatory hurdles and paves the way for Hiro and the broader Stacks community to advance their blockchain initiatives.
