SEC moves to drop $16.5 million securities suit against Dragonchain

The US Securities and Exchange Commission (SEC) has filed a joint stipulation with blockchain firm Dragonchain (CRYPTO:DRGN) to dismiss its lawsuit alleging unregistered securities offerings.

The case was filed in August 2024 in a Seattle federal court and accused Dragonchain and related entities of raising $16.5 million through the sale of DRGN tokens in 2017 and subsequent years without proper registration.

According to the SEC, Dragonchain raised $14 million during a presale and initial coin offering (ICO) in 2017, which the agency classified as investment contracts subject to securities laws.

An additional $2.5 million worth of DRGN tokens were sold between 2019 and 2022, with proceeds allegedly used for business expenses and technology development.

In the joint stipulation filed on April 24, the SEC stated it “believes the dismissal of this case is appropriate,” citing the work of its Crypto Task Force in developing 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,” the filing added.

The lawsuit had been stayed since October 2024 after Dragonchain made a settlement offer, with the pause extended in January 2025 following a presidential executive order emphasising US leadership in digital assets.

Following news of the SEC’s planned dismissal, Dragonchain’s DRGN token surged nearly 95% in one day but remains significantly below its January 2018 peak.

This move aligns with the SEC’s recent pattern of dropping or settling high-profile crypto cases under the current administration.

The SEC’s Crypto Task Force, established in January 2025, has also ended investigations into other crypto firms including Coinbase, Ripple (CRYPTO:XRP), Kraken, OpenSea, Crypto.com, and Immutable (CRYPTO:IMX).

At the time of reporting, the Dragonchain (DRGN) price was $0.07973.