In 2017, the Walt Disney Company’s blockchain-based program received a report from the United States’ Securities and Exchange Commission (SEC) over an initial coin offering (ICO). On Tuesday, the SEC announced that it had filed charges against Dragonchain, the Dragon Company, the Dragon Foundation, and their founder, John Joseph Roets, for their roles in a 2017 initial coin offering and presale that raised nearly $16.5 million.
The Securities and Exchange Commission Has Filed a Lawsuit Against Dragonchain and Its Inventor.
The financial watchdog claims that in August 2017 and again in October and November of the same year, Dragonchain Foundation, Dragonchain, and Roets conducted an illegal offering of blockchain tokens called DRGN, raising a total of $14 million. Moreover, the aforementioned 3 organizations and their founder are charged with nearly $2.5M worth of DRGN trading.
According to reports, they will do so between 2019 and 2022 in order to fund company expenses, develop their operations, and promote the use of Dragonchain technology. The securities agency published a report on Dragonchain in July 2017 before its initial public offering. As stated in the related paper, it encouraged companies to register with the government agency, indicating that it intends to treat multiple ICOs and security offers as subject to regulation.
The Dragonchain Founder Says the SEC Is Using an Antiquated Methodology
The Commission indicated that it would seek dismissal of prejudgment interest, permanent injunctions, civil penalties, and conduct-based injunctions against Roets and the three platforms named above for violating the Securities Act of 1933.
According to a letter sent by the SEC to Dragonchain’s Twitter account, Roets knew of the SEC’s plans to prosecute charges related to the unregistered securities’ scale before the limitation decree’s conclusion.
He criticized the governmental agency for regulating cryptocurrencies with a method that appeared outdated but was not. Initiated in 2014 by Walt Disney Company, the Dragonchain blockchain became an open source venue and began serving the general public in 2016. Ex-Disney employees banded together to form the Dragonchain Foundation in an effort to standardize the process.