Crypto Lending Protocol Aave Says SEC Has Ended 4-Year Investigation: 'DeFi Will Win'
TL;DR
The SEC has concluded its 4-year investigation into Aave with no enforcement action. The DeFi protocol's CEO calls this a victory for decentralized finance amid regulatory pressure.
Key Takeaways
- •The SEC has ended its 4-year investigation into Aave without recommending enforcement action.
- •Aave's CEO stated the process required significant resources to protect the protocol and broader DeFi ecosystem.
- •Aave currently holds $32.79 billion in assets, up from $13.21 billion four years ago.
- •This follows a trend of crypto cases being dropped under the Trump administration's pro-crypto stance.
- •Despite regulatory relief, some crypto privacy developers still face legal challenges including prison sentences.
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Aave announced Tuesday that the U.S. Securities and Exchange Commission has concluded its investigation into the decentralized finance (or DeFi) protocol, with no intention to recommend an enforcement action.
It comes four years after the investigation was opened, the Aave CEO said on X, over which time the project has invested significant time, energy, and funds in protecting itself from the SEC.
“This process demanded significant effort and resources from our team, and from me personally as the founder, to protect Aave, its ecosystem, and DeFi more broadly,” Stani Kulechov, CEO and founder of Aave, said on X, alongside a letter received from the SEC.
After four years, we are finally ready to share that the SEC has concluded its investigation into the Aave Protocol.
This process demanded significant effort and resources from our team, and from me personally as the founder, to protect Aave, its ecosystem, and DeFi more… pic.twitter.com/aZeLrZz5ZQ
— Stani.eth (@StaniKulechov) December 16, 2025
“DeFi has faced unfair regulatory pressure in recent years. We’re glad to put this behind us as we enter a new era where developers can truly build the future of finance,” Kulechov continued. “DeFi will win.”
Reached for comment, an SEC representative told Decrypt that it "does not comment on the existence or nonexistence of a possible investigation."
Aave is a decentralized lending protocol that allows users to lend or borrow cryptocurrencies. It currently holds $32.79 billion worth of assets, according to DefiLlama, up significantly from $13.21 billion four years ago. Its AAVE token has inched upwards 1.4% over the past 24 hours to a recent price of $186, according to CoinGecko.
Interestingly, the President Donald Trump-backed World Liberty Financial crypto project submitted a proposal in 2024 to build upon the Aave protocol. A couple of months later, World Liberty Financial bought almost $1 million worth of AAVE tokens.
Since then, the president’s venture has shifted its focus to issuing its USD1 stablecoin as Trump’s administration pushed through stablecoin legislation. However, the project appears to have broader plans for the future.
Kulechov did not immediately respond to Decrypt’s request for comment on whether World Liberty Financial’s embrace of Aave played a role.
Aave becomes the latest in a long line of crypto cases and investigations being dumped by Trump’s SEC, including those focused on Binance, Coinbase, OpenSea, and many more. Maybe most notably, the SEC and Ripple Labs dropped their legal disputes in August, after the SEC’s 2021 allegations about the unregistered sale of securities via XRP.
For many, this is a result of the president’s pro-crypto stance. That said, others remain wary of this administration’s crypto legacy, as several crypto privacy software developers are facing prison time.
Samourai Wallet developer Keonne Rodriguez is one of those developers, currently set to serve a five-year prison sentence. On Monday, Trump told Decrypt that he would “look at” granting Rodriguez a pardon, although predictors on Myriad—a prediction market platform developed by Decrypt’s parent company, Dastan—give it just a 20% chance of happening before February 2026.