The SEC informed Aave in an Aug. 12 letter that it does not intend to recommend enforcement action, which now forms part of the broader pullback in crypto enforcement under the Trump administration. While AAVE’s price reaction was modest, the closure still removes a long-standing regulatory overhang for the company and its token.
Aave Escapes Enforcement
Aave founder and CEO Stani Kulechov said the US Securities and Exchange Commission (SEC) ended a four-year investigation into the decentralized finance protocol. The disclosure was made in a Tuesday post on X, where Kulechov shared a letter dated Aug. 12 from the SEC stating that the agency does “not intend to recommend an enforcement action” against Aave.
The language in the letter suggests that Aave was under the threat of potential enforcement action after a probe that was initiated roughly four years ago, during a time when US regulators ramped up scrutiny of crypto and decentralized finance platforms. Kulechov welcomed the conclusion of the matter, and described it as an important turning point for the industry. He said the closure of the investigation allows Aave and other developers to move forward “as we enter a new era where developers can truly build the future of finance.”
So far, market reaction to the news has been a bit muted. According to CoinMarketCap, the AAVE token rose more than 3% after the announcement was shared, climbing to around $187.85. At press time, the price of AAVE fell to about $186.95. The price move could suggest that investors are relieved and confident after the removal of a major regulatory overhang that lingered over the protocol for many years.
AAVE price action over the past 24 hours (Source: CoinMarketCap)
The conclusion of the Aave investigation seems to align with a shift in the SEC’s approach to crypto enforcement since US President Donald Trump took office in January. Trump campaigned on reducing regulatory pressure on the digital asset industry, and recent actions by the SEC suggest a softening of its stance. Over the past few months, the regulator has dropped or paused several long-running investigations and legal cases involving major crypto firms, including Uniswap Labs, Gemini and Ripple.
That trend was also pointed out in a recent report by The New York Times, which found that since January the SEC paused, dropped, or dismissed roughly 60% of its cases involving cryptocurrency companies and projects.
Source: https://coinpaper.com/13157/aave-cleared-as-sec-closes-four-year-investigation
