The U.S. Securities and Exchange Commission (SEC) has officially dismissed its 2017 initial token offering (ICO) lawsuit against blockchain platform Dragonchain. The case initially charged Dragonchain with conducting an unregistered $16.5 million securities offering. The DRGN token price surged more than 1,001 TP3T in a matter of hours after the news broke.

Dragonchain was originally developed by Disney in 2014 and has since operated independently. in 2017, the company raised approximately $16.5 million through the sale of DRGN tokens to retail investors without a traditional securities registration. in 2022, the SEC filed a lawsuit against Dragonchain for violations of the federal securities laws. the lawsuit is expected to be filed by the end of this year, but the company has not yet filed a lawsuit.

Federal court documents show that the parties have reached a mutual agreement to dismiss the case without prejudice, and the case is closed. The case was not accompanied by fines or admissions of negligence, and the parties may still raise similar issues in the future. the SEC did not publicly state the reasons for its ruling.

Industry analysts believe that the SEC's string of defeats in cryptocurrency cases such as Ripple, Coinbase, and Binance may have prompted it to reevaluate its enforcement priorities. The dismissal comes at a critical time in the crypto industry's relationship with U.S. regulators.

Key crypto players were quick to respond: FOX Business crypto reporter Eleanor Terrett called the withdrawal "sensational" and hinted at tensions within US regulators. Traders and crypto players see this as a victory for the industry, but legal observers say the non-biased withdrawal means that future action against Dragonchain or similar projects is still possible.

Dragonchain management has yet to issue an official statement on the closure of the case. In recent years, the company has become more focused on blockchain enterprise applications and interoperability solutions, and is no longer as high profile as it was during the 2017-2018 bull market. It is unclear whether the legal unwinding and new attention will drive a material recovery for DRGN or its platform.

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