The United States Securities and Exchange Commission (SEC) has charged Dragonchain Inc, Dragonchain Foundation, The Dragon Company, and their founder, John Joseph Roets for allegedly raising $16.5 million in unregistered securities offerings.
According to the securities watchdog, the defendants conducted an unregistered offering of Dragon tokens (DRGN) in two phases, including discounted “presale” and an initial coin offering (ICO).
SEC Charges Dragonchain Founder
The SEC alleges that in 2017, the defendants raised roughly $14 million from about 5,000 investors around the world, including the United States through an ICO.
Then, between 2019 and 2022, they made an additional $2.5 million, making it $16.5 million in total, from the sale of DRGN tokens “to cover business expenditures to further develop and market Dragonchain technology.”
The agency said it is seeking “permanent injunctions, disgorgement with prejudgment interest, civil penalties against and conduct-based injunctions against each defendant.”
The latest charges come as no surprise to Roets as he already knew this was coming. The Commission had already informed him earlier this year that they were going to charge him and his companies for the sale of unregistered securities.
In a response to the SEC in May, Roets said that the regulatory was “picking and choosing projects to target, often singling out those with the biggest opportunity to disrupt incumbent interests, while giving a free pass to others.”
The news about the charges had a negative impact on the price of DRGN. At the time of filing this report, the token was trading at $0.022, down more than 13% on the day.
SEC Targets Crypto Firms
Meanwhile, the SEC has continued to take enforcement action against crypto firms in recent times, especially firms that raised funds through ICOs.
In June, the regulator launched a probe into leading cryptocurrency exchange, Binance, to determine whether the exchange broke any rules regarding the sale of securities when its native token, BNB, was sold through an ICO in 2017.
Just recently, American crypto exchange Coinbase was being investigated by the SEC over alleged securities listings.
Source: https://coinfomania.com/u-s-sec-charges-dragonchain-founder-for-raising-16-5m-via-unregistered-ico/#utm_source=rss&%23038;utm_medium=rss&%23038;utm_campaign=u-s-sec-charges-dragonchain-founder-for-raising-16-5m-via-unregistered-ico