Key Takeaways
- The regulator argued at the time that the DRGN tokens met the criteria of an investment contract and should have been registered under federal securities laws.
- As per the complaint, Dragonchain raised $14 million in 2017 through a presale and initial coin offering (ICO) of its DRGN token
The U.S. Securities and Exchange Commission has officially dismissed its lawsuit against blockchain firm Dragonchain two years after accusing it of unregistered offering of crypto asset securities. The SEC and Dragonchain filed a joint stipulation on April 24 in a Seattle federal court to drop the case with prejudice, barring it from being reopened in the future.
In the court filing, the SEC cited the establishment of its Crypto Task Force as a key reason for reevaluating and ultimately withdrawing the case. “The Commission believes the dismissal of this case is appropriate,” the agency wrote, describing the move as a discretionary policy decision.
The SEC had initiated legal action against Dragonchain in August 2022, alleging the company conducted an unregistered offering of crypto asset securities. As per the complaint, Dragonchain raised $14 million in 2017 through a presale and initial coin offering (ICO) of its DRGN token. The SEC claimed an additional $2.5 million was raised between 2019 and 2022, reportedly used for business operations and development of the project’s blockchain infrastructure.
The regulator argued at the time that the DRGN tokens met the criteria of an investment contract and should have been registered under federal securities laws. The lawsuit also named the Dragonchain Foundation, The Dragon Company, and founder Joseph Roets as co-defendants.
The case was paused in October 2024 following a settlement proposal from Dragonchain. In January 2025, the stay was extended further after a sweeping executive order from President Donald Trump directed federal agencies to strengthen the United States’ role in the global digital assets space. That order prompted the SEC to reassess its approach to crypto oversight, leading to the creation of the Crypto Task Force shortly thereafter.
According to the SEC’s filing, members of the new task force held a meeting with Dragonchain’s leadership in March 2025 to discuss the broader regulatory framework. Dragonchain’s representatives reportedly emphasized that their blockchain tech served multiple purposes beyond financial transactions, such as identity management and automation, and argued that it should not be classified strictly as a financial product.
The case against Dragonchain had reflected a wider enforcement trend during the tenure of former SEC Chair Gary Gensler, under whom several crypto firms faced similar charges for unregistered offerings.
The dismissal of the Dragonchain lawsuit appears consistent with this shift. The SEC’s filing concludes that the agency “in the exercise of its discretion and as a policy matter” no longer considers continued litigation necessary. The agreement includes no admission of wrongdoing and leaves both parties to bear their own legal costs.
