The Securities and Exchange Commission, in a joint stipulation with Dragonchain, expressed its intent to drop the lawsuit, referencing the efforts of its Crypto Task Force.
The US Securities and Exchange Commission is seeking to dismiss its unregistered securities lawsuit against blockchain company Dragonchain, marking the agency’s latest retreat in crypto-related cases.
In a joint stipulation filed with Dragonchain on April 24 in Seattle federal court, the SEC stated it “believes dismissing the case is appropriate,” pointing to the work of its Crypto Task Force in shaping the regulatory framework for crypto assets.
“The Commission and the Defendants agree that this litigation be dismissed with prejudice […] and without costs or fees to either party,” the filing states.
In August 2024, the SEC filed a lawsuit against Dragonchain, Inc., its backer the Dragonchain Foundation, The Dragon Company, and Dragonchain’s founder, Joseph Roets, alleging they raised $16.5 million through an unregistered securities offering involving a crypto token.
The SEC claimed that the Dragonchain (DRGN) tokens raised $14 million during a presale in August 2017 and an initial coin offering (ICO) held in October and November of that year. At the time, the SEC argued that the company needed to register as the tokens were investment contracts under securities laws.
The SEC stated that an additional $2.5 million worth of DRGN tokens was sold between 2019 and 2022, which it claimed was used to fund business expenses and advance the company’s technology.
The lawsuit was paused in October after Dragonchain presented a settlement offer to the SEC, with the delay extended in January when the agency stated the case should remain on hold following US President Donald Trump’s executive order that month, which called for the country’s “leadership in digital assets.”
Meanwhile, the DRGN token surged 95% in the past 24 hours to over 8.5 cents following news of the SEC’s planned dismissal. However, it remains down about 98.5% from its January 2018 peak of $5.46, according to CoinGecko.
This is the latest crypto-related case the SEC has dropped under the Trump administration.
The SEC established a Crypto Task Force in January, the day after Trump returned to the White House, to spearhead the regulator’s efforts in engaging with the crypto industry.
An agency memo reveals that its task force met with Dragonchain representatives on March 24 to discuss the SEC’s approach to handling crypto.
The SEC has also dropped several of its most high-profile lawsuits against crypto firms, including those involving Coinbase, Ripple, and Kraken.
The SEC has also discontinued investigations into other crypto firms, including OpenSea, Crypto.com, and Immutable, with no further actions planned.
