SEC Drops Dragonchain Lawsuit as Agency Revises Crypto Enforcement Approach

The U.S. Securities and Exchange Commission (SEC) has filed to dismiss its 2022 lawsuit against blockchain infrastructure firm Dragonchain. The joint document, filed at the Seattle federal court on April 24, represents a major change within the agencys new digital asset regulatory approach.

The SEC accused Dragonchain of conducting an unregistered securities offering during its 2017 initial coin offering (ICO), alleging the company raised approximately $16.5 million by selling its DRGN token. According to the commission, the token fulfilled the legal requirements for security, thus requiring federal registration. Additional sales between 2019 and 2022 were also alleged to be unlawful.

According to the filing, the commission acknowledged the efforts of the newly formed Crypto Task Force and stated that the dismissal of the lawsuit aligns with its current priorities. Both the SEC and Dragonchain agreed to end the litigation “with prejudice,” meaning the case cannot be brought again and without any award of legal costs to either party.

Trump-Era SEC Leadership Signals Broader Policy Shift

The decision follows a broader trend within the SEC since the start of President Donald Trumps second term. With Paul Atkins sworn in as the new SEC Chair earlier this week, the agency appears to be moving away from enforcement-heavy actions toward more regulatory clarity and industry engagement.

The SEC, under Biden and Gary Gensler, made numerous attempts to pursue crypto firms by accusing their token offerings of violating federal securities laws. Dragonchain, Coinbase, Ripple, and Kraken were among several targeted during that period.

The formation of the Crypto Task Force in January has led to increased engagement with stakeholders across the digital asset space. According to records, the task force met with Dragonchain representatives on March 24 to explore jurisdictional concerns on blockchain tokens.

Market Reaction and SEC Roundtable on Custody Regulation

Following the announcement of the lawsuit‘s dismissal, Dragonchain’s native token DRGN experienced a sharp price increase, climbing over 95% within 24 hours. The token, which peaked at $5.46 in 2018, remains significantly below its all-time high but showed renewed investor interest after the legal development.

SEC Chair Paul Atkins will deliver his first public remarks on digital assets at the agencys third crypto industry roundtable. The event will address crypto custody issues and feature participants from major firms, including Kraken, Fireblocks, and Fidelity.