SEC Drops Lawsuit Against Dragonchain Following Launch of Crypto Task Force

U.S. SEC Dismisses Dragonchain Case Amid Shift in Crypto Regulation Strategy

The U.S. Securities and Exchange Commission (SEC) has moved to dismiss its legal case against blockchain technology company Dragonchain, marking a notable shift in the agency’s approach to digital assets regulation. The decision, made jointly with Dragonchain, follows the recent establishment of the SEC’s new Crypto Task Force, which aims to re-evaluate the agency's stance on crypto asset classifications.

In a court filing submitted on Thursday, the SEC stated that “in light of the foregoing, and in the exercise of its discretion and as a policy matter,” dismissing the case was appropriate. This resolution brings an end to a legal dispute that began in August 2022, when the SEC accused Dragonchain and affiliated entities of conducting an unregistered securities offering through its 2017 initial coin offering (ICO).

At the time, under the leadership of then-Chair Gary Gensler, the SEC had intensified enforcement actions against a number of crypto companies. The agency argued that many digital assets, particularly those sold via ICOs, qualified as securities and should have been registered accordingly.

However, the regulatory climate has evolved. The launch of the SEC’s Crypto Task Force in January marked a turning point. The task force is expected to help clarify which crypto assets fall within the agency's jurisdiction, with a particular focus on distinguishing between securities and non-securities. Notably, the task force has already indicated that many so-called “memecoins” are unlikely to be classified as securities.

This regulatory pivot comes as the SEC adapts to changing political dynamics. With former SEC Chair Gensler stepping down and a more crypto-friendly administration taking office under President Donald Trump, the agency has gradually pulled back from several high-profile cases, including enforcement actions against major platforms like Coinbase and Kraken.

News of the case dismissal appears to have had an immediate impact on the market. The price of Dragonchain’s native token, DRGN, surged nearly 96% in the past 24 hours, trading at $0.07782, according to data from CoinMarketCap.