SEC Closes Aave Investigation, Here’s What’s Next for AAVE

• SEC staff ended the Aave investigation with no enforcement recommendation, per a shared letter.
• Aave says the probe lasted nearly four years, removing a major DeFi regulatory overhang.
• Aave says 2026 priorities include Aave V4, Horizon expansion, and the Aave App.

The U.S. Securities and Exchange Commission has concluded its investigation into DeFi protocol Aave, bringing an end to a regulatory process that lasted nearly four years, according to Aave founder Stani Kulechov. 

The development removes a major source of uncertainty around one of the largest decentralized finance platforms in the market, based on the reports describing the closure notice.

Aave founder Stani Kulechov confirmed the outcome in a public post, saying the regulator will not pursue enforcement action against the protocol, as described in the SEC staff letter he shared. 

SEC Letter Cites Staff Decision Not to Recommend Enforcement

According to the information shared by Kulechov, the SEC informed Aave that it does not plan to recommend enforcement action. A letter dated August 15, referenced in the announcement, shows the agency decided to close the case after reviewing the protocol’s operations.

The investigation included a Wells Notice, which is typically issued when the SEC staff is considering enforcement. Despite this, the agency ultimately chose not to move forward.

The case began during a period when US regulators took a strict approach toward digital assets under former President Joe Biden. During that time, several crypto firms faced actions over registration and compliance issues. 

Related: Aave ‘Push’ Gains Ireland’s MiCA Approval for Euro-to-Crypto Conversion Services

More recently, the SEC has shifted direction by dropping some cases, setting up a crypto task force, and working on new rules focused on onchain activity.

Aave Labs said that it remained in active dialogue with regulators throughout the process and can now move forward without legal uncertainty hanging over the protocol. The closure adds Aave to a growing list of crypto projects that are no longer under active SEC review.

What’s Next for Aave?

According to figures shared by Kulechov, Aave reached a peak of $75 billion in net deposits and has processed more than $3.3 trillion in total deposits since launch. Nearly $1 trillion in loans have been issued through the platform over the past five years.

Aave currently holds the largest share of the DeFi lending market, accounting for roughly 59% of total lending activity and over 60% of active loans. The protocol also generated $885 million in fees this year, more than half of all lending protocol fees combined.

Kulechov said this growth places Aave at a size comparable to some of the top banks in the United States. More importantly, starting next year, Aave Labs plans to focus on three main areas. 

Related: Aave App Launches with 9% Savings Yield in Europe: What Next for AAVE Price?

These three include a full redesign of the protocol known as Aave V4, expansion into institutional markets through its Horizon platform, and broader user adoption via the Aave App.

Aave V4 is designed to combine liquidity across networks while Horizon aims to bring traditional financial assets into onchain lending. On the other hand, the Aave App will simplify access to DeFi for everyday users.

Kulechov said the long-term goal is to bring trillions of dollars in assets and millions of users on-chain.