The U.S. Securities and Exchange Commission (SEC) has dropped its lawsuit against blockchain firm Dragonchain, signalling a broader shift in the agency’s approach to regulating the cryptocurrency sector.
The development was first reported by Eleanor Terrett, a former Fox Business correspondent now with CryptoAmerica.
Terrett confirmed that the SEC and Dragonchain had reached an agreement to dismiss the ongoing litigation, aligning with the regulator’s recent strategy of scaling back enforcement actions within the crypto industry.
In recent months, the SEC has paused or abandoned several cases against major cryptocurrency firms, including notable players such as Coinbase, Binance, Robinhood, Uniswap, and OpenSea.
Last month, Ripple also disclosed that the SEC had decided to withdraw its long-running case against the company.
The SEC had initially filed its complaint against Dragonchain in 2022, accusing the project of conducting an unregistered securities offering via its 2017 initial coin offering (ICO), which allegedly raised millions.
Regulators argued that Dragonchain’s DRGN token qualified as a security under the Howey Test.
In a joint court filing submitted on Thursday, the SEC and Dragonchain requested the dismissal of the 2022 lawsuit.
The filing referenced the ongoing work of the SEC’s newly established Crypto Task Force, which aims to provide greater clarity on how digital assets should be treated under federal securities laws.
Formed earlier this year, the task force has begun holding industry roundtables to foster dialogue and outline potential regulatory pathways for cryptocurrencies.
Attention now turns to SEC Chair Paul Atkins, who is expected to address the crypto sector during the agency’s third industry roundtable on crypto trading, taking place today, 25 April, from 1:00 to 5:00 p.m. Eastern Time. It will mark Atkins’ first public remarks to the crypto community since his appointment in December.
