SEC Drops Four-Year Aave Probe Under Trump Administration—No Action Taken

Regulatory clouds part for DeFi pioneer.

The U.S. Securities and Exchange Commission has quietly closed its book on Aave Labs. After a marathon four-year investigation—spanning multiple political administrations—the agency decided not to pursue enforcement. The case is officially dead.

What the Closure Means

It’s a clean bill of health, at least from the SEC’s enforcement division. No charges. No settlements. No wrist-slaps. For Aave’s team and its backers, it’s the ultimate regulatory non-event—the kind that sends a bullish signal through the crypto markets without a single word from the commission itself.

The Silent Signal to the Market

In the world of regulation, what doesn’t happen often speaks louder than what does. A four-year probe ending with zero action suggests the regulators looked hard, turned over every stone, and found nothing they were willing to litigate. It’s a tacit nod to the legal robustness of Aave’s structure—a win earned through silence.

For an industry used to grappling with “regulation by enforcement,” this outcome is a rare exhale. It allows builders to keep building, minus the Sword of Damocles dangling over their protocol. Of course, in traditional finance, they’d probably have spent those four years and millions in legal fees just to get a meeting—crypto moves faster, even when under the microscope.

The probe is over. The precedent, however subtle, is set. Now, the market watches to see if other DeFi blue chips get the same silent treatment—or if the SEC just decided to pick on someone its own size.

Aave holders push governance change

Right after the update from Stani, a fresh governance proposal appeared, asking Aave holders to take full control of the Aave brand, domains, social media, naming rights, and developer gateways.

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

The proposal states that any non-DAO party using aave.com, subdomains, communication channels, or online assets should not control them alone. It asks the DAO to request these assets through a vote and MOVE them to a legal setup with protections.

The proposal also says app.aave.com can be considered a product of Aave Labs, but argues that the domain itself is separate from the software and that monetising any application depends heavily on brand access and the gateway effect of aave.com.

The proposal says private groups cannot call themselves Aave or present themselves as “being Aave” without a service deal.

It says the DAO cannot represent itself through another entity because that weakens the DAO’s control and creates a situation where a third party could put its own interests first.

It also warns that leaving this matter unresolved puts the DAO model at risk, including all service providers working for the DAO on equal terms.

One example cited is BGD Labs, created in 2022. Its contributor says the team has helped build Aave, is paid well, but never gained the right to use the Aave name.

The proposal warns that if one group controls brand assets, every other contributor becomes subordinate, which changes incentives across the ecosystem and restricts fair work for all groups involved in $AAVE.

The proposal says the DAO does not need guidance from any single group and that its system evolves through updates and changes decided by holders. It says no outside group should argue that certain decisions are needed “for Aave” or “for everybody.”

The proposal then adds that many DAOs give their token holders control of trademarks, domains, and communication channels, and notes that AAVE holders have the same basis for that claim.

The DAO argues that saying the brand does not belong to holders is “dubious” both in practice and in principle.

It also clarifies that the debate is not judging Aave Labs as a contributor, not tied to past disputes over swap features, not related to legal limits of building an entity for domain ownership, and not blocking Aave from managing communication or gateways in the future either.

According to the proposal, the DAO only asks for holders to signal control and ownership, with any management role decided later through normal DAO processes.

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