- SEC has dropped its investigation of Bitcoin L2 Stacks and Hiro systems
- STX soon gained by 6.47% in 24 hours, after hiking by 19.61% on the weekly charts
2024 has not only witnessed crypto-market volatility, but also many legal battles. Throughout the year, the SEC has expressed its desire to continually enforce and persecute to ensure conformity with legal standards from its viewpoint.
One crypto firm that has suffered legal scrutiny is Hiro (formerly Blockstack).
SEC terminates Stacks and Hiro investigation
After three years of investigations, the SEC dropped the investigation into Hiro systems, according to its latest filing report. Muneeb, the co-creator of Stacks, announced the good news by stating,
“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), through a letter to the firm, claimed,
“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 2021, Hiro reported their engagement with the SEC over issues, but the agency remained skeptical. First of all, Hiro argued 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 started an investigation that lasted for three years.
SEC’s harassment of crypto companies
The Securities and Exchange Commission (SEC) has been in the spotlight among crypto investors, traders, and founders over its constant meddling. This year, the SEC has sued various firms, such as Coinbase, arguing that Coinbase’s investment contracts under the Howey test are securities.
Also, the agency sued Consensys, arguing that it was involved in selling and offering securities as an unregistered broker.
Needless to say, many in the community aren’t happy with what the SEC has been doing. According to Muneeb, for instance,
“We need a regulatory system that meets builders of innovative open protocols where they are. We’ll continue working with policymakers and developers to help make this happen.”
What next for Stacks?
The conclusion of the investigation is a major win for Stacks, offering the firm hope for a better-decentralized future for blockchain technologies. Essentially, the win is a huge boost for the crypto industry and offers a framework for other firms to follow.
Undoubtedly, the success means Stacks’s STX has a better reputation in the industry, which can offer investors confidence. This will drive prices, trading volume, and market cap, north on the charts.
Impact on STX’s price charts
At the time of writing, STX was trading at $1.68 after a 19.61% surge in 7 days. Its market cap hiked 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.