The U.S. Securities and Exchange Commission (SEC) has concluded its multi-year investigation into the Aave Protocol without recommending enforcement action, ending nearly four years of scrutiny over the decentralized finance (DeFi) lending platform.
Summary
- The SEC ended its investigation into Aave Protocol without recommending enforcement action, concluding nearly four years of regulatory scrutiny.
- The probe, which focused on whether Aave’s operations and AAVE token fell under U.S. securities laws, did not result in any findings or charges.
- Aave’s case follows a broader 2025 trend of the SEC dropping or dismissing several high-profile crypto investigations, reflecting a shift toward clearer policy guidance under new leadership.
Aave founder Stani Kulechov disclosed the outcome on X. See below.
The investigation, which began in late 2021 or early 2022, focused on whether Aave’s operations, particularly the AAVE token, fell under U.S. securities laws and required registration.
The end of the investigation allows Aave to continue operating without immediate risk of U.S. enforcement action.
It also reduces regulatory uncertainty around Aave’s core products.
Why it matters
This marks the latest in a series of high-profile crypto investigations closed without charges in 2025.
The SEC has recently shifted its approach, dropping or dismissing cases against several crypto firms like Coinbase, Kraken, and Uniswap Labs.
A New York Times investigation reveals that over 60% of ongoing crypto cases were either paused, reduced, or dismissed after Donald Trump’s inauguration on January 20. This includes cases involving well-known Trump supporters like the Winklevoss twins and major industry players.
This change in strategy follows a leadership transition at the SEC, signaling a move away from regulation through litigation and toward clearer policy guidance.
Meanwhile, Aave fell 60% from its year-to-date high of $377 reached on Aug. 24 to $150 over the following three months. It’s hovering at around $185 at last check on Tuesday, down over 51% for the year.
