In a surprising turn of events for the cryptocurrency community, the U.S. Securities and Exchange Commission (SEC) has officially dropped its lawsuit against Dragonchain – a blockchain project previously accused of issuing unregistered securities. This move not only marks a legal turning point for Dragonchain but also created a strong wave of reaction in the market: DRGN token surged by 104% within 24 hours, with trading volume exploding by over 11,600%, hitting $1.4 million.
Dragonchain was previously scrutinized by the SEC for its 2017 ICO
In August 2022, the SEC filed a lawsuit against Dragonchain, alleging that the project had conducted an unregistered securities offering through its 2017 ICO and a subsequent discounted token sale. The agency claimed that the DRGN token issuances helped Dragonchain raise approximately $14 million from 5,000 global investors, along with an additional $2.5 million from 2019 to 2022.
However, Dragonchain has always denied these allegations. They assert that DRGN is a utility token, used as a software license (micro-license) for functions on their platform, rather than an investment tool. Dragonchain also argues that the company had a business model operational before the ICO took place – which makes the application of the SEC's 'Howey standard' in this case a major topic of controversy.
The turning point comes from policy changes and political pressure
The lawsuit has been suspended since late 2023, after Dragonchain proposed a settlement. By January 2024, the situation became even more favorable for Dragonchain when President Donald Trump signed an executive order requesting a pause on certain crypto-related lawsuits. This is the first step in a series of moves changing the U.S. government's approach to the cryptocurrency industry.
In February 2024, the SEC went even further by announcing that meme coins would no longer be classified as securities, indicating a significant loosening in the assessment of digital assets. And this week, the SEC officially filed to dismiss the lawsuit against Dragonchain in federal court in Seattle, stating that this is a 'policy issue' within the process of adjusting its legal strategy regarding crypto.
The establishment of the 'Crypto Task Force' and the wave of lawsuit terminations
At the same time, the SEC established a new dedicated task force named the Crypto Task Force, tasked with clearly identifying which types of digital assets fall under the SEC’s jurisdiction and which do not. This aims to end the prolonged legal ambiguity that has lasted for many years.
Dragonchain is just one of many crypto companies recently dropped by the SEC – most of which were targeted during Chairman Gary Gensler's tenure. This policy shift clearly shows the influence of the Biden administration, which has publicly expressed support for the blockchain industry.
The market reacts strongly: DRGN token skyrockets
Immediately after the news of the SEC dropping the lawsuit was announced, the price of DRGN token surged by 104% within 24 hours, according to data from CoinGecko. Trading volume also increased by over 11,600%, reaching $1.4 million – reflecting a return of investor confidence after years of legal uncertainty.
However, it should be noted that the current price of DRGN is still 98% lower than its historical peak of $5.46, and the market cap is only about $28.74 million. This indicates that there is still room for recovery of the token, but it also raises the question: Can Dragonchain truly return to the race?
Contact with the crypto market and Binance users
The SEC's withdrawal of the lawsuit against Dragonchain is a clear positive sign for the entire crypto market, especially in the context of many other projects on Binance Smart Chain that have faced similar legal risks. The SEC gradually stepping back from such controversial lawsuits could create a clearer and more friendly investment environment, particularly for developers and crypto projects in the U.S.
For Binance users, this new trend could open up investment opportunities in tokens that were previously overlooked or undervalued due to legal risks, while also encouraging more projects to return to build or integrate with the BNB Chain ecosystem.
Conclusion
The SEC's sudden withdrawal of the lawsuit against Dragonchain is an iconic turning point for the entire crypto industry. It shows that regulators are beginning to listen and adjust their approach rather than stubbornly applying classic securities laws to stifle innovation.
However, users should remain cautious of short-term market fluctuations and closely monitor subsequent policies from the SEC and U.S. agencies.
🔺 Risk Warning: Investing in cryptocurrencies always carries high risks. Asset prices can fluctuate significantly in a short period. This article is not investment advice. Please consider carefully and only invest when you fully understand the risks.