Along with the founder and controlling individual, John Joseph Roets, the U.S. Securities and Exchange Commission (SEC) has filed charges against entities connected to Dragonchain, alleging that the defendants conducted an unregistered cryptocurrency offering.
On Tuesday, the SEC submitted the lawsuit to the Western District of Washington U.S. District Court (August 16, 2022).
The unregistered offering of DRGN tokens raised $16.5 million, in accordance with the American regulatory body, which Roets and his three organizations, Dragonchain Inc., Dragonchain Foundation, and the Dragon Company, did “illegally.”
In 2017, an initial coin offering (ICO) collected $14 million from roughly 5,000 investors worldwide, accounting for a significant percentage of the proceeds.
Additionally, the defendants sold $2.5 million worth of DGRN tokens between 2019 and 2022 to fund the development and promotion of the Dragonchain technology as well as operating costs.
The SEC is requesting “permanent injunctions, disgorgement with prejudgment interest, civil fines against and conduct-based injunctions against each defendant” as a result of the defendants’ alleged breach of federal securities laws.
SEC And Ripple Case Mirrored
Similar to a lawsuit the SEC brought against Ripple in December 2020, the most recent development. The organization, CEO Brad Garlinghouse, and co-founder Chris Larsen were charged with making an unregistered $1.3 billion security offering.
The legal dispute between Ripple and the SEC is still going on, but in the meantime, the defendants have denied the SEC’s allegations and asserted that XRP is not a security.
The largest cryptocurrency exchange, Coinbase, is the subject of a recent securities regulator investigation. Some of the tokens listed on the site, according to the SEC, are unregistered securities.
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