SEC ends four-year probe with no action
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Regulatory pressure has eased after the U.S. Securities and Exchange Commission wrapped up its long-running review of the aave protocol, prompting fresh scrutiny of market and governance risks. SEC ends four-year investigation with no action The U.S. Securities and Exchange Commission has formally closed its nearly four-year investigation into the Aave Protocol, deciding not to pursue any enforcement action. The probe focused on whether the AAVE token and the platform’s operations breached U.S. securities laws, a key concern for many DeFi projects. On December 17, 2025, market commentator CryptoSavingExpert highlighted the outcome, noting that the SEC’s four-year probe had “officially ended with no action.” However, the agency has not released detailed public guidance on its reasoning, leaving broader legal questions around DeFi classification unresolved. This resolution immediately removes a major regulatory overhang for Aave and its core products. Moreover, it follows a broader pattern in 2025, when several high-profile SEC crypto investigations involving Coinbase, Kraken, and Uniswap Labs also concluded without charges. AAVE token price reaction to the SEC decision The market response to the SEC news was muted. According to TradingView, the AAVE token price trades around $188, down roughly 3% over 24 hours. It briefly slipped to $185 earlier in the day amid a wider downturn across the crypto market. That said, the token remains more than 51% below its late August peak of $377. Analysts argue that the subdued price action reflects ongoing volatility and persistent concerns about DeFi governance, rather than optimism about reduced regulatory risk. Moreover, several market strategists suggest that macro conditions and liquidity constraints are overshadowing individual crypto enforcement actions. In their view, regulatory clarity helps sentiment, but does not immediately reverse broader market trends. Internal disputes, treasury flows and Aave Labs revenue While the SEC cloud has lifted, Aave Labs is still…
