SEC drops securities case against Dragonchain, a Disney-incubated crypto firm

The United States Securities and Exchange Commission has agreed to drop its securities lawsuit against Dragonchain, the blockchain platform originally developed by Disney. According to the regulator, the dismissal of the case is “appropriate” given the evolving approach to crypto oversight and the work of its newly formed Crypto Task Force, which was created shortly after President Donald Trump issued an executive order in January directing federal agencies to prioritise US leadership in blockchain and digital asset development. In an April 24 joint stipulation filed in a Seattle federal court, the SEC pointed to recent developments in its regulatory approach and stated that its 2022 litigation should be “dismissed with prejudice and without costs or fees to either party.” A dismissal with prejudice means the case is considered closed and cannot be refiled in the future. The decision also follows a meeting with Dragonchain representatives on March 24, as suggested by an internal memo that has been made public. According to the memo, the meeting was requested by Dragonchain founder Joe Roets and focused on how blockchain tech is being used outside of finance. The team walked SEC staff through real-world use cases, such as fraud prevention, identity verification, and secure data tracking, arguing that blockchain should be viewed as foundational software, not just a tool for fundraising or investment. Roets also argued that blockchain should be viewed as a core infrastructure that can be used for transparency, identity management, and automation, rather than being narrowly defined as just a financial instrument. What is Dragon c hain? Dragonchain is a hybrid blockchain platform that combines the security of public blockchains with the confidentiality of closed networks. Initially developed by Disney in 2014 and later open-sourced in 2016, it was designed to support enterprise-grade applications with modular architecture, smart contracts written in traditional programming languages (like Python, Java, and C#), and a five-layer consensus model for scalability and trust. Unlike many public chains, Dragonchain doesn’t require all data to be published on-chain. Sensitive business logic and data remain private, while verification hashes can be anchored to public blockchains like Ethereum or Bitcoin. Why did the SEC sue Dragonchain? The SEC’s lawsuit, originally filed in August 2022, centred on Dragonchain’s 2017 token sale. The agency claimed that Dragonchain, along with its foundation and founder Joe Roets, raised $14 million through a presale and ICO of its DRGN tokens without registering them as securities. At the heart of the case was the SEC’s argument that DRGN tokens were investment contracts under US securities law. The commission sought penalties, disgorgement, and injunctions on the basis that Dragonchain should have registered the offering, especially since it took place after the agency had already issued guidance that warned many ICOs could fall under its jurisdiction. DRGN rallies 99% Dragonchain’s native token DRGN rallied nearly 100% after the news broke. At the time of publication, it was still up over 96% in the past 24 hours. While the altcoin is currently trading roughly 98% below its all-time high hit in 2018, today’s rally helped it break out of a multi-week downtrend that began earlier this year. According to some analysts, the recent price surge could spark an extended rally in the coming weeks, especially due to its US origins. The post SEC drops securities case against Dragonchain, a Disney-incubated crypto firm appeared first on Invezz

Source: Invezz