Dragonchain’s native token, DRGN, surged by 97% after the U.S. Securities and Exchange Commission (SEC) confirmed its plan to withdraw a long-standing lawsuit against the blockchain project. The decision marks a significant shift in regulatory tone, with the SEC opting to dismiss the case with prejudice, making it impossible to refile the charges in the future.

In a joint filing submitted on April 24, the SEC cited a strategic pivot influenced by its newly established Crypto Task Force. The regulator stated that dropping the case aligned with its evolving approach to digital asset enforcement and market oversight.

The Lawsuit’s Background: $16.5 Million in Alleged Unregistered Sales

The SEC originally filed its case in August 2022, accusing Dragonchain, its foundation, and its founder, Joseph Roets, of raising $16.5 million through an unregistered securities offering. The bulk of the funds came from a 2017 presale and initial coin offering (ICO), which generated $14 million, followed by an additional $2.5 million raised between 2019 and 2022.

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The agency argued that DRGN tokens met the criteria of an investment contract under the Howey Test and should have been registered accordingly. The case stood as one of the most prominent actions taken against blockchain startups during the previous regulatory cycle led by former SEC Chair Gary Gensler.

Trump’s Executive Order Triggers Broader Policy Reevaluation

Dragonchain’s legal battle stalled in October 2024 when the company submitted a settlement proposal. Shortly after, President Donald Trump issued an executive order urging U.S. regulators to adopt a more innovation-friendly stance toward digital assets. That order prompted a significant reassessment of the SEC’s role in the crypto space.

Following Trump’s directive, the agency formed a Crypto Task Force in January 2025. The task force immediately began engaging with industry stakeholders, including a private meeting with Dragonchain’s leadership on March 24. According to internal memos, the discussion emphasised blockchain’s non-financial applications—ranging from digital identity to automation—and explored new regulatory frameworks.

Dragonchain Argues for Blockchain’s Role Beyond Finance

During the SEC meeting, founder Joe Roets led Dragonchain’s delegation in arguing that the technology should not be narrowly defined as a financial instrument. Instead, he framed blockchain as core infrastructure, similar to the internet, that serves broader transparency and operational use cases.

The task force reportedly agreed to reassess the project under this new lens. This dialogue ultimately influenced the SEC’s decision to withdraw from the case entirely, representing a significant departure from its former enforcement-first philosophy.

DRGN Price Reacts with Massive Rally

Dragonchain’s price response was swift and explosive. DRGN, which had been trading near all-time lows for much of 2023 and early 2024, posted two large green candles—commonly referred to as “God candles”—immediately after the dismissal news broke. The token nearly doubled in value within 24 hours, although it remains significantly below its 2018 peak.

This rally marks a potential turning point for the project, which has struggled to regain momentum since the end of the last bull market. Investors now view the regulatory clarity as a green light for Dragonchain to resume expansion and ecosystem development.

SEC Retreats from Broader Crypto Enforcement Push

The Dragonchain dismissal is part of a larger trend. Since early 2025, the SEC has been quietly backing away from its most high-profile crypto enforcement actions. The agency dropped lawsuits against Coinbase, Ripple, and Gemini—cases that once symbolised its aggressive posture toward the industry.

Additionally, the SEC abandoned its fraud case against HEX founder Richard Heart after a federal judge threw out the complaint. The agency declined to revise and refile the charges, effectively ending the case.

This pattern suggests that the SEC, under its new mandate and leadership, may shift toward a more cooperative regulatory approach, focused on clarity, innovation, and collaboration rather than litigation.

Final Thoughts

Dragonchain’s legal victory not only lifted DRGN’s price but also signalled a possible end to the hostile regulatory era that defined much of the previous administration’s approach to crypto. With the SEC reassessing its role and industry leaders pushing for more constructive engagement, projects like Dragonchain may finally receive the breathing room they need to thrive.

As U.S. crypto regulation continues to evolve, this moment could mark the beginning of a more balanced and innovation-friendly landscape. Investors and developers alike will be watching closely to see which projects benefit next from this regulatory reset.

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