SEC files lawsuit against Dragonchain

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against entities related to Dragonchain along with the founder and handling person, John Joseph Roets, alleging that the defendants conducted an unregistered cryptocurrency offering.

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The SEC filed the complaint in the U.S. District Court for the Western District of Washington on August 16 (Tuesday).

According to the American regulator, Roets and his three entities i.e. Dragonchain Inc., Dragonchain Foundation, and the Dragon Company illegally raised $16.5 million via the unregistered offering of DRGN tokens.

In a complaint, the SEC allegedly stated that Roets, DragonChain, and The Foundation sold an unregistered offering of Dragon tokens (DRGN) to approximately 5,000 investors in 2017.

Further, Between 2019 and 2022, the defendants also sold $2.5 million worth of DGRN tokens to develop and elevate the Dragonchain technology and take care of business expenses.

Following the defendants’ apparent violation of federal securities laws, the SEC is looking for permanent injunctions, disgorgement with prejudgment interest, civil penalties against, and conduct-based injunctions against each defendant.

Also read, SEC to investigate all crypto exchanges

In similar events, a lawsuit was filed by SEC against Ripple in December 2020. The agency accused the company, CEO Brad Garlinghouse, and co-founder Chris Larsen, of running a $1.3 billion unregistered security offering.

Meanwhile, the defendants have denied the SEC’s claims, saying that XRP is not a security, while the legal battle between Ripple and the agency is still ongoing. However, a recent judgment was ruled in Ripple’s favor.

Newly, the securities regulator also launched a probe on cryptocurrency exchange giant Coinbase. As previously reported by NFTHi, the agency believes that some of the tokens listed on the Coinbase platform are unregistered securities.


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