'DeFi will win,' Aave CEO says after SEC ends years-long probe

The Securities and Exchange Commission has concluded its investigation into the Aave Protocol, Aave CEO Stani Kulechov confirmed, adding Aave to the growing list of crypto entities no longer under the agency’s scrutiny.

In a post on Tuesday on X, Kulechov said that the SEC had "concluded its investigation" after four years. 

"DeFi has faced unfair regulatory pressure in recent years," Kulechov said. "We’re glad to put this behind us as we enter a new era where developers can truly build the future of finance."

The SEC and Aave did not immediately respond to a request for comment. The SEC typically does not comment on the existence or nonexistence of a possible investigation, a spokesperson said.

In a screenshot of a letter dated Aug. 15, attached to the post, it says that the SEC planned not to recommend an enforcement action against the Aave Protocol.

The letter also cites the Wells Notice —  a form of communication from SEC staff that lets a firm know that the agency's staff may recommend an enforcement action against them. 

Earlier this month, Ondo Finance said that the SEC had closed an investigation that started under the Biden administration. Under the previous presidential administration, the SEC took a cautious approach to digital assets, while also bringing several cases against big-name crypto firms for failing to register with the agency. 

Since the agency has taken a different approach to digital assets, including dropping many enforcement actions around registration issues against crypto firms, creating a crypto task force and embarking on "Project Crypto," to update its rules with a focus on onchain activity.