SEC Drops 3-Year Investigation into Hiro (Formerly Blockstack) Systems, STX Price Skyrockets

One crypto firm that has suffered legal scrutiny is Hiro (formerly Blockstack). After three years of investigations, the SEC dropped the investigation into Hiro

The Securities and Exchange Commission (SEC) has not shied away from crypto firms in 2024. Several lawsuits were filed by the agency, including one against Coinbase. The SEC claimed that Coinbase's investment contracts, as determined by the Howey test, are securities.

Furthermore, the agency filed a lawsuit against Consensys, alleging that the company sold and offered securities without registering as a broker.

As expected, many in the community are dissatisfied with the SEC's actions. According to Muneeb:

“We need a regulatory system that meets builders of innovative open protocols where they are at. We’ll continue working with policymakers and developers to help make this happen.”

After three years of investigations, the SEC has dropped its probe into Hiro's systems, as stated in the company's latest filing report. The good news was announced by Muneeb, the co-creator of Stacks, who stated,

“Earlier this week, 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..”

The agency (SEC) stated in a letter to the firm,

“We have concluded the investigation as to Stacks Blockchain. Based on our information as of this date, we do not intend to recommend an enforcement action by the Commission against Hiro Systems PBC.”

In 021, Hiro announced their engagement with the SEC over issues, but the agency remained skeptical. First of all, Hiro claimed that Stack tokens could not be treated as securities since they did not offer any management services to the blockchain.

However, the SEC disagreed and initiated an investigation that lasted for three years.

The conclusion of the investigation is a major win for Stacks, offering the firm hope for a better-decentralized future for blockchain technologies. In essence, the win is a huge boost for the crypto industry and provides a framework for other firms to follow.

Undoubtedly, the success will enhance STX's reputation in the industry, which can instill confidence in investors. This will drive prices, trading volume, and market cap up on the charts.

At the time of writing, STX was trading at $1.68 after a 19.61% surge in 7 days. Its market cap increased by 6.47% to $2.483B in 24 hrs. However, the trading volume declined by 5.5% to $140M over the same period.

AMBCrypto’s analysis revealed that STX's bullish market sentiment is on an uptrend now. At press time, STX's Chaikin Money Flow was positive at 0.10. This suggested a hike in buying pressure with a higher volume-weighted average.

Source: Tradingview

At the same time, the Relative Strength Index (RSI) at 51 recorded a sharp hike from the oversold zone over the last 7 days.

This pointed to a further sustained rise in buyers’ dominance.

Source: Tradingview

Finally, the altcoin's Money Flow Index at 58 affirmed a potential uptrend because of the rising buying pressure.

Therefore, if the buying pressure is maintained and STX closes above its significant resistance level of around $1.797, the bulls will control the market and drive prices up to $2.138. However, if markets see a correction, STX will retest its critical support at $1.266.