Dragonchain soars 97% as SEC moves to drop long-standing 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.

According to a joint filing on April 24, the SEC and Dragonchain have agreed the case should be dismissed with prejudice, meaning it can’t be refiled. The SEC cited the work of its newly established Crypto Task Force and said dropping the suit was the appropriate step.

The lawsuit, originally filed in August 2022 , accused Dragonchain, its foundation, and founder Joseph Roets of raising $16.5 million through an unregistered token sale. 

The commission’s case centred on a 2017 presale and ICO that raised $14 million through DRGN tokens, with an additional $2.5 million sold between 2019 and 2022 to fund business operations and tech development.

At the time, the regulator argued DRGN qualified as an investment contract and should have been registered under securities laws. 

The case, however, was paused in October 2024 after Dragonchain submitted a settlement offer and was later extended in January, following a major executive order from President Trump that called for the U.S. to take a leading role in digital assets.

The order prompted a broader reassessment of how cryptocurrency is regulated in the U.S., and the SEC cited this shift in approach when deciding to withdraw from the Dragonchain lawsuit.

In fact, the SEC’s newly formed Crypto Task Force, established the day after Trump returned to office, met with Dragonchain representatives on March 24. According to an internal agency memo , the discussion centred on how the SEC should approach crypto regulation, with a focus on blockchain’s non-financial applications.

Dragonchain’s team, led by founder Joe Roets, argued that blockchain should be seen as foundational software, used for transparency, identity management, and automation, rather than purely as a financial instrument.

For Dragonchain, the turnaround marked a sharp reversal for DRGN, which has been in a downtrend since 2021. As of press time, DRGN is still down heavily from its 2018 peak, but the token formed two God candles after the news broke, shooting up nearly 100% in the past 24 hours.

Since the start of the year, the SEC has been steadily walking back from some of its biggest crypto battles. It pulled out of long-running lawsuits against Coinbase , Ripple , and Gemini , cases that once defined the agency’s hardline stance on digital assets under former chair Gary Gensler.

As previously reported by crypto.news, it recently dropped its fraud case against HEX founder Richard Heart, after a federal judge tossed the complaint and the SEC chose not to amend it.