US SEC attempts to withdraw ICO securities lawsuit against Dragonchain

Author: Jesse Coghlan, CoinTelegraph; Translated by: Deng Tong, Golden Finance

The Securities and Exchange Commission (SEC) is considering revoking unregistered securities lawsuits against blockchain company Dragonchain, the agency 's latest concession in cryptocurrency-related fields.

The SEC filed a joint agreement in Seattle federal court on April 24 in Dragonchain, which stated that it was “deemed appropriate to dismiss the case” and noted the work the agency’s crypto task force has done in helping “develop a crypto asset regulatory framework.”

The document reads: “The Commission and the defendants agree to dismiss this lawsuit without charging any fees to either party.”

The Securities and Exchange Commission sued Dragonchain, Inc.; its supporters Dragon Foundation; Dragon Corporation; and Dragonchain founder Joseph Roets claimed in August 2024 that they raised $16.5 million through unregistered securities offerings.

According to the U.S. Securities and Exchange Commission, Dragonchain (DRGN) tokens raised $14 million in pre-sales in August 2017 and in the initial token offering (ICO) conducted in October and November of the same year. At that time, the company stated that since the token is an investment contract under the securities law, the company needs to register.

The Securities and Exchange Commission said that between 2019 and 2022, another $2.5 million worth of DRGN was sold, allegedly used to pay for business expenses and develop the company's technology.

The lawsuit was put on hold in October after Dragonchain filed a settlement offer to the SEC. The SEC said the case should continue to be suspended due to a comprehensive executive order issued by U.S. President Donald Trump earlier that month calling for the U.S. to "play a leadership role in the digital asset space", and the SEC said the case should continue to be suspended.

Meanwhile, the DRGN token has risen 95% over the past day to more than 8.5 cents, according to CoinGecko, which is affected by the SEC's planned rejection of the news, but is still down about 98.5% from its January 2018 peak of $5.46.

Dragonchain's token price rose sharply after the Securities and Exchange Commission (SEC) dismissed the lawsuit. Source: CoinGecko

SEC abandons regulation of cryptocurrency after Trump takes office

This is the latest case involving cryptocurrencies that the SEC has abandoned during the Trump administration.

The day after Trump returned to the White House, the SEC formed a cryptocurrency task force in January to lead regulatory cooperation with the cryptocurrency industry.

An institution memorandum showed that its working group met with Dragonchain representatives on March 24 to discuss how the SEC should handle cryptocurrencies.

The SEC also dismissed some of the most compelling lawsuits against cryptocurrency companies, including those against Coinbase, Ripple and Kraken.

It also abandoned investigations into other cryptocurrency companies, including OpenSea, Crypto.com and Immutable, and had no plans to take further action.