- The case is part of a broader pattern of the SEC backing off crypto enforcement under the Trump administration.
- Dragonchain’s DRGN token price jumped 95% on news of the dismissal but remains 98.5% below its 2018 peak.
The U.S. Securities and Exchange Commission (SEC) is seeking to dismiss its unregistered securities lawsuit against Dragonchain and its founder, marking another retreat in the agency’s crypto enforcement actions. According to a joint stipulation filed on April 24 in a Seattle federal court, the SEC stated that dismissal “is appropriate” citing its Crypto Task Force’s efforts to develop regulatory frameworks for crypto assets.
“The Commission and the Defendants stipulate that this Litigation be dismissed with prejudice […] and without costs or fees to either party,” reads the court filing. The SEC had originally sued Dragonchain in August 2024, claiming the blockchain firm raised $16.5 million through unregistered securities offerings.
The lawsuit alleged that Dragonchain raised approximately $14 million through a presale and initial coin offering (ICO) of its DRGN tokens in 2017, with an additional $2.5 million raised between 2019 and 2022. The SEC had contended these tokens were investment contracts under securities laws and required proper registration.
The case was initially stayed in October after Dragonchain presented a settlement offer, which was later extended in January following President Trump’s executive order on digital assets leadership. The news of the planned dismissal caused Dragonchain’s token to surge 95% to over 8.5 cents, though it remains down approximately 98.5% from its January 2018 peak of $5.46, according to CoinGecko.
SEC’s Shifting Approach to Crypto Regulation
This dismissal represents the latest in a series of crypto-related cases abandoned by the SEC under the Trump administration. The agency established its Crypto Task Force in January, coinciding with Trump’s return to office, to lead regulatory engagement with the cryptocurrency industry.
An SEC memo shows that the task force met with Dragonchain representatives on March 24 to discuss regulatory approaches to cryptocurrency. This meeting appears to have influenced the agency’s decision to drop the case.
Broader Pattern of Regulatory Retreat
The Dragonchain dismissal follows similar SEC actions withdrawing high-profile lawsuits against major crypto companies including Coinbase, Ripple, and Kraken. The agency has also terminated investigations into other firms such as OpenSea, crypto.com, and Immutable.
This regulatory pullback comes after the SEC task force met with Trump-supporting firms to discuss crypto regulation, signaling a significant shift in the agency’s enforcement approach. However, many questions remain about the future of crypto regulation, as explored in a recent analysis on the SEC’s U-turn on crypto.
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