Source: Cointelegraph
Original: “SEC Seeks to Dismiss Cryptocurrency ICO Securities Lawsuit Against Dragonchain”
The SEC is seeking to dismiss its unregistered securities lawsuit against blockchain company Dragonchain, marking the latest concession by the agency in crypto-related cases.
According to a joint statement submitted by the SEC and Dragonchain in Seattle federal court on April 24, the SEC stated, “In light of the agency's cryptocurrency special working group's efforts in helping to develop a regulatory framework for crypto assets, the Commission believes that it is appropriate to dismiss this case.”
The document stated, “The Commission and the defendants agree that this lawsuit should be ‘dismissed with prejudice,’ and that neither party shall bear any costs or expenses.”
The SEC sued Dragonchain Inc., its supporter Dragonchain Foundation, The Dragon Company, and Dragonchain founder Joseph Roets in August 2024, accusing them of conducting an unregistered securities offering through a cryptocurrency token, raising $16.5 million.
The SEC claimed that the Dragonchain (DRGN) token was pre-sold in August 2017 and conducted its initial coin offering (ICO) from October to November of the same year, raising a total of $14 million. The SEC pointed out that these tokens constituted investment contracts under securities law, and the company should therefore register.
Additionally, the SEC stated that from 2019 to 2022, Dragonchain sold an additional $2.5 million worth of DRGN tokens to cover operational expenses and develop company technology.
The case was paused last October when Dragonchain proposed a settlement to the SEC. In January of this year, U.S. President Donald Trump issued a broad executive order calling for U.S. “leadership in the digital asset space,” after which the SEC requested to continue the case's suspension.
Meanwhile, following the news of the SEC's plan to withdraw the lawsuit, the DRGN token surged 95% in the past 24 hours, surpassing 8.5 cents. However, according to CoinGecko data, the token is still down about 98.5% from its all-time high of $5.46 in January 2018.
SEC Withdraws Multiple Crypto Lawsuits Under Trump Administration
This is another cryptocurrency-related case that the SEC has dropped since the Trump administration took office.
The SEC established a “crypto special working group” the day after Trump returned to the White House in January, specifically responsible for the agency's engagement and regulatory affairs with the crypto industry.
An agency memo revealed that the SEC's working group met with Dragonchain representatives on March 24 to discuss how the SEC should handle crypto-related issues in the future.
In addition to the Dragonchain case, the SEC has recently withdrawn several high-profile lawsuits against the crypto industry, including legal actions against Coinbase, Ripple, and Kraken.
Furthermore, the SEC has also terminated investigations into other crypto companies, including OpenSea, Crypto.com, and Immutable, stating that no further action will be taken.
Related: Bitcoin (BTC) remains above $90,000, so why is the ‘greed’ sentiment fading?
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