SEC Sues Dragonchain Over Sale Of Unregistered Securities

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The official notice issued by SEC reads: “Through this offering, the defendants allegedly raised approximately $14 million from approximately 5,000 investors around the world, including the United States.”

In yet another measure to heighten crypto regulations, the US Securities and Exchange Commission charges Dragonchain Inc., Dragonchain Foundation, and the Dragon Company by accusing the founder, John Joseph Roets, of raising $16.5M by the illegal sale of unregistered crypto asset securities.

In a notice, the agency claims that the company behind the cryptocurrency DRGN allegedly sold its unregistered tokens in two phases, once at a discounted rate during a presale in 2017 and later as an ICO in November-December 2017. Through this, the firm successfully acquired $14M from its investors.

SEC further states that all three firms under John Roets sold Dragonchain tokens worth $2.5M to cover expenses related to growing the ecosystem between 2018 and 2022. Some of these transactions occurred after the authorities found the DRGN to be “securities.”

John Roets was informed of SEC’s accusations earlier this year and, in response, sent an open letter addressed to the agency to dispute the latter’s claims. The letter goes over the history of the project’s conception and details the various security and scalability measures enforced by Dragonchain.

Moreover, the letter utilizes several constitutional amendments to convey that other projects, including Ethereum, were let off the hook despite selling unregistered securities using financial models similar to Dragnonchain’s. Lastly, Dragonchain raises some ethical concerns regarding SEC’s statements, claiming the agency accepts false information from individuals with ulterior motives.

Written by
Ayush Pande
The official notice issued by SEC reads: “Through this offering, the defendants allegedly raised approximately $14 million from approximately 5,000 investors around the world, including the United States.”

In yet another measure to heighten crypto regulations, the US Securities and Exchange Commission charges Dragonchain Inc., Dragonchain Foundation, and the Dragon Company by accusing the founder, John Joseph Roets, of raising $16.5M by the illegal sale of unregistered crypto asset securities.

In a notice, the agency claims that the company behind the cryptocurrency DRGN allegedly sold its unregistered tokens in two phases, once at a discounted rate during a presale in 2017 and later as an ICO in November-December 2017. Through this, the firm successfully acquired $14M from its investors.

SEC further states that all three firms under John Roets sold Dragonchain tokens worth $2.5M to cover expenses related to growing the ecosystem between 2018 and 2022. Some of these transactions occurred after the authorities found the DRGN to be “securities.”

John Roets was informed of SEC’s accusations earlier this year and, in response, sent an open letter addressed to the agency to dispute the latter’s claims. The letter goes over the history of the project’s conception and details the various security and scalability measures enforced by Dragonchain.

Moreover, the letter utilizes several constitutional amendments to convey that other projects, including Ethereum, were let off the hook despite selling unregistered securities using financial models similar to Dragnonchain’s. Lastly, Dragonchain raises some ethical concerns regarding SEC’s statements, claiming the agency accepts false information from individuals with ulterior motives.

Written by
Ayush Pande