Hiro Known As Blockstack, Says STX Token Isn’t A Security Anymore

Hiro known as Blockstack before believes that it has finally converted the crypto security to a decentralized utility token and that STX isn’t security anymore so let’s read more in our latest cryptocurrency news.

Hiro known as Blockstack announced that the Stacks tokens aren’t security any longer and as such, Hiro will stop filing annual reports to the SEC, as CEO Muneeb Ali wrote in a blog post:

“Today, Hiro Systems PBC filed its 2020 annual report with the SEC. We expect this to be our last annual report filing, marking the end of a nearly two-year journey since Hiro’s SEC-qualified offering of Stacks tokens (STX) in July 2019.”

Hiro (formerly Blockstack PBC) has filed a 2020 annual report with the SEC.

We expect this to be our last annual filing, as we no longer treat Stacks (STX) as US securities.

This concludes a two-year journey; we anticipate filing an exit report.

Blog: https://t.co/wWN8qLc7sS

— Muneeb (@muneeb) April 28, 2021

Hiro declared that STX isn’t longer security but this isn’t the same as the SEC declaring it. That’s the whole problem that was exemplified by the Blockstack journey as there’s no precedence for the SEC declaring a crypto token that was once security and isn’t any longer. When asked about it, Ali declined to comment as to whether or not the company discussed the legal status of the token with the SEC. blockstack made waves back in 2019 when It completed the first SEC-approved token sale and raised more than $23 million. At the same time, some in the industry started worrying whether holding the SEC’s hand is worth it because there are crypto projects that don’t play by the rules and succeed anyway.

Hiro announced in December that it will no longer be treating Stacks as a security token once the Stacks 2.0 blockchain launched in January. Now the company made it official with the SEC. Stacks tokens were created as security out of an abundance of caution as the company noted. The company now believes it made good on its promise to decentralized the stacks ecosystem because the broader ecosystem hasn’t got any central governing authority. Ali said:

“If Hiro disappears, can the rest of the ecosystem function, or is there really a reliance on this company?”

Ali and Hiro are now basing their arguments on the Howey Test which the SEC uses to determine whether a token represents security. The Howey Test refers to a Supreme Court case from 1946 involving a citrus grove. Under this test, the investment contract exists if there’s an investment made in a common enterprise with the expectations of profit derived from efforts of others according to former SEC official William Hinman.