SEC Moves to Dismiss Lawsuit Against Blockchain Firm Dragonchain, DRGN Surges 100%

The U.S. Securities and Exchange Commission (SEC) has filed a joint motion with blockchain company Dragonchain to dismiss its ongoing lawsuit against the firm.

The decision, submitted on Thursday, reflects a broader policy shift within the agency following the establishment of its Crypto Task Force earlier this year.

The SEC originally launched legal action against Dragonchain in August 2022, accusing the firm and its affiliates of conducting an unregistered securities offering through their 2017 initial coin offering (ICO).

Under former Chair Gary Gensler, the SEC pursued aggressive enforcement actions against numerous crypto projects, asserting that many digital assets qualified as unregistered investment securities.

However, with President Donald Trump’s reelection and Gensler’s departure, the SEC has softened its stance on cryptocurrency regulation.

The newly formed Crypto Task Force has focused on clarifying which digital assets fall outside the agency’s jurisdiction, recently stating that most meme coins are not considered securities.

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“In light of the foregoing, and in the exercise of its discretion and as a policy matter, the Commission believes the dismissal of this case is appropriate,” the SEC noted in its filing.

The news of the dismissal sparked a sharp rally in Dragonchain’s native token, DRGN, which surged more than 100% in the past 24 hours, reaching $0.07898, according to CoinMarketCap.

As reported, Paul Atkins was sworn in as Chairman of the SEC on Monday, marking a leadership shift that is being welcomed by the digital asset industry.

Under Atkins’ leadership, the SEC has already withdrawn or delayed several prominent cases against crypto firms.

The agency dropped its lawsuits against Coinbase and Cumberland DRW earlier this year, and a separate investigation into Uniswap Labs closed in February without enforcement action.

Last week, the agency also closed its investigation into CyberKongz, a prominent Ethereum-based NFT and gaming project, with no enforcement action taken.

More recently, the SEC announced it would not pursue further legal action against Richard Schueler, better known as Richard Heart, the founder of Hex, PulseChain, and PulseX.

SEC attorney Matthew Gulde informed New York District Court Judge Carol Bagley Amon that the regulator would not file an amended complaint following the court’s earlier dismissal of its case.

Judge Amon had thrown out the SEC’s initial complaint on February 28, citing a lack of jurisdiction, as Heart’s activities were deemed not specifically directed at U.S. investors.

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