Dragonchain’s DRGN Surges 97% as SEC Plans to Dismiss Lawsuit
Dragonchain’s DRGN rallied over 97% after the U.S. Securities and Exchange Commission said it plans to dismiss its long-running lawsuit against the project over alleged unregistered securities sales.
The recent joint filing on April 24 between the SEC and Dragonchain revealed that the case is set to be dismissed with prejudice, meaning it cannot be refiled. The SEC attributed this decision to the work of its newly established Crypto Task Force, stating that dropping the lawsuit was the appropriate course of action.
The Lawsuit and Background
The lawsuit, initially filed in August 2022, accused Dragonchain, its foundation, and founder Joseph Roets of raising $16.5 million through an unregistered token sale. The case focused on a 2017 presale and ICO that raised $14 million through DRGN tokens, with an additional $2.5 million sold between 2019 and 2022 for business operations and tech development.
The SEC argued that DRGN should have been registered under securities laws as an investment contract. However, the case was put on hold in October 2024 when Dragonchain presented a settlement offer. Following a significant executive order from President Trump in January that emphasized the U.S.’s role in digital assets, the lawsuit was extended as regulators reassessed cryptocurrency regulation.
The Turnaround and Future Outlook
With the establishment of the Crypto Task Force by the SEC, discussions with Dragonchain representatives on crypto regulation occurred on March 24. The focus was on blockchain’s non-financial applications, with Dragonchain emphasizing its use for transparency, identity management, and automation.
For Dragonchain, the dismissal of the lawsuit marked a significant reversal, leading to a sharp increase in DRGN’s value. Despite still being below its 2018 peak, the token surged nearly 100% in the 24 hours following the news.
Notably, the SEC has been stepping back from several high-profile crypto battles this year, including cases against Coinbase, Ripple, Gemini, and HEX founder Richard Heart. This shift in approach reflects a changing landscape in cryptocurrency regulation under the current SEC leadership.