{"id":65929,"date":"2022-08-17T12:43:23","date_gmt":"2022-08-17T09:43:23","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=65929"},"modified":"2025-09-06T22:41:42","modified_gmt":"2025-09-06T19:41:42","slug":"sec-sues-dragonchain-ico-organizers-for-14-million","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/sec-sues-dragonchain-ico-organizers-for-14-million\/","title":{"rendered":"SEC sues Dragonchain ICO organizers for $14 million"},"content":{"rendered":"<p><span data-descr=\"U.S. Securities and Exchange Commission\" class=\"old_tooltip\">SEC<\/span> <a href=\"https:\/\/www.sec.gov\/litigation\/litreleases\/2022\/lr25468.htm?utm_medium=email&#038;utm_source=govdelivery\">charged<\/a> John Joseph Roets and related companies with an unregistered offer of securities valued at $16.5 million during the initial coin offering (ICO) and subsequent token sales.<\/p>\n<p>The regulator alleges that in 2017 Roets, Dragonchain Inc, Dragonchain Foundation and Dragon Company conducted an unregistered Dragon (DRGN) coin offering in two stages:<\/p>\n<ul class=\"wp-block-list\">\n<li>a presale in August for members of an investment club;<\/li>\n<li>a public sale in October\u2013November.<\/li>\n<\/ul>\n<p>According to the complaint, the ICO raised $14 million from about 5,000 investors worldwide, including the United States.<\/p>\n<p>From 2019 to 2022, Roets and his companies sold DRGN for another $2.5 million. The funds were raised to &#8220;cover business expenses, as well as further development and marketing of Dragonchain&#8217;s technology.&#8221; Some of the sales occurred after the SEC classified the tokens as securities.<\/p>\n<p>The Commission sought injunctions against the defendants&#8217; conduct, disgorgement of investors&#8217; losses with interest, and civil penalties.<\/p>\n<p>DRGN price peaked at $5.11 in January 2018 (<a href=\"https:\/\/coinmarketcap.com\/currencies\/dragonchain\/\">CoinMarketCap<\/a>). At the time of writing the token trades around $0.02. The asset&#8217;s market cap is $8.5 million, with a 24-hour trading volume of $235,115.<\/p>\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/rWyHQFN0i-p-VDK-sBOY7FQCQBRSW1f471W9xbHAH2V7QCmgEKGDRaXlL2mQvH-Zz4iDHZCtRze49jeHhYjlccdGIVcQvIb0oa1p7aT-BP-cxCHy-jl01Gbi4VDGFAQw6suPaEhVDSDXbZf5u2yRdRc\" alt=\"SEC sues Dragonchain ICO organizers for $14 million\"\/><figcaption>Source: CoinMarketCap.<\/figcaption><\/figure>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cEven though Dragonchain is a zombie coin from 2017, such cases allow the SEC to set a precedent that can be used to regulate the broader space. So this isn\u2019t really about this particular token,\u201d commented Bill Hughes, ConsenSys\u2019 senior counsel.<\/p>\n<\/blockquote>\n<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p lang=\"en\" dir=\"ltr\">Even though Dragonchain is a 2017 zombie coin, these cases allow the SEC to develop precedent that can be used to regulate the broader space. So this isn\u2019t really about this particular token necessarily. <a href=\"https:\/\/t.co\/WyRTHdR4Ie\">https:\/\/t.co\/WyRTHdR4Ie<\/a><\/p>\n<p>\u2014 wchughes.eth \ud83e\udd8a (@BillHughesDC) <a href=\"https:\/\/twitter.com\/BillHughesDC\/status\/1559589670337630208?ref_src=twsrc%5Etfw\">August 16, 2022<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>As reported in 2021 the SEC <a href=\"https:\/\/forklog.com\/en\/news\/sec-officials-oppose-creating-a-safe-harbour-for-icos\">opposed<\/a> the creation of a &#8216;safe harbour&#8217; that would shield ICO projects from the Commission&#8217;s accountability.<\/p>\n<p>The idea of introducing three-year regulatory holidays for token-sale startups was proposed by SEC Commissioner Hester Peirce in 2020.<\/p>\n<p>Follow ForkLog&#8217;s Bitcoin news in our <a href=\"https:\/\/telegram.me\/forklog\" target=\"_blank\" rel=\"nofollow noopener\">Telegram<\/a> \u2014 crypto news, prices and analysis.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The SEC charged John Joseph Roets and related companies with an unregistered offer of securities worth $16.5 million during the ICO and subsequent token sales.<\/p>\n","protected":false},"author":1,"featured_media":65930,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1162,319,128],"class_list":["post-65929","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-court-cases","tag-ico","tag-sec"],"aioseo_notices":[],"amp_enabled":true,"views":"24","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/65929","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=65929"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/65929\/revisions"}],"predecessor-version":[{"id":65931,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/65929\/revisions\/65931"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/65930"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=65929"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=65929"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=65929"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}