Dragonchain is an enterprise and start-up-ready platform to build flexible and scalable blockchain applications.
On August 16, SEC charged Joe Roets, CEO of the firm, and three entities associated including Dragonchain Inc., Dragonchain Foundation, and The Dragon Company of raising $16.5 million by selling unregistered crypto securities.
According to SEC, the defendants raised $14 million from about 5,000 investors around the world through Dragonchain’s ICO in 2017. They subsequently made an additional $2.5 million from 2019 to 2022 through the DRGN token sale.
SEC is seeking permanent orders, restitution, civil penalties, and conduct-based injunctions against the CEO and his associated entities.
In an open letter dated May 25, Roets stated that he was confident he had a “very strong case” and that the SEC was “picking and choosing projects to target, often singling out the ones with the biggest opportunity to disrupt incumbent interests, while giving a free pass to others.”
The SEC has been ramping up its regulation in crypto space recently. Last month, the Commission declared 9 crypto tokens listed on Coinbase as unregistered securities. The exchange was then under investigation for allowing users to trade those tokens.
Regardless of SEC efforts, their approach to “regulation by enforcement” has been met with criticism from crypto industry leaders, lawmakers, and regulators alike.
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