SEC sues Dragonchain for $16.5M unregistered crypto asset securities offerings

The U.S. Securities and Exchange Commission sued John Joseph Roets and three entities he controls — Dragonchain Inc., Dragon Foundation, and The Dragon Company — for their roles in raising $16.5M in unregistered crypto asset securities offerings.In a statement issued Tuesday, the SEC alleged that in 2017 Roets, Dragonchain, and the Foundation conducted unregistered offerings of Dragon tokens (DRGN-USD)) in two phases, a discounted "presale" in August 2017 to members of a crypto investment club, and an initial coin offering in October and November 2017 marketed primarily to crypto investors. The SEC complaint said that marketing for the tokens discussed DRGN's investment value, pricing and "listing" on trading platforms. Between 2019 and 2022, Roets, Dragonchain, the Foundation, and The Dragon Co. allegedly offered and sold about $2.5M of DRGNs to cover business expenditures to further develop and market Dragonchain technology. Some of those sales allegedly occurred after a state regulator determined that DRGNs are securities.The SEC seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties against and conduct-based injunctions against each defendant.Dragonchain didn't immediately respond to an email seeking comment.In April, SEC Chair Gary Gensler said there's almost no chance that crypto trading platforms aren't trading securities