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Usha Yadav
Aug 17, 2022
by Usha Yadav

SEC Sues Dragonchain Founder For Unregistered Initial Coin Offering

SEC Dragonchain

Table of contents

  1. Unregistered Crypto Asset Securities Offerings
  2. Dragonchain Foundation
The founder of Dragonchain is the subject of a complaint from the U.S. Securities and Exchange Commission (SEC) for allegedly generating millions through unregistered offers of crypto asset securities. In particular, the SEC is suing John Joseph Roets and the three businesses he owns - Dragonchain, the Dragonchain Foundation, and The Dragon Company - because they failed to file more than $16 million in securities offerings involving digital assets for five years.

Unregistered Crypto Asset Securities Offerings

An unregistered offering of Dragon tokens (DRGN) was made by Roets, Dragonchain, and the Foundation to members of the crypto investing club through a discounted presale, according to a document filed in the U.S. District Court for the Western District of Washington.

The SEC reports that Roets and the three Dragonchain organizations allegedly broke the Securities Act. They reportedly raised millions of dollars in 2017 by selling Dragon tokens in an ICO primarily targeted at cryptocurrency investors.

According to the SEC, the money was channeled into marketing and development initiatives for Seattle-based Dragonchain. This enterprise blockchain start-up was first created inside Disney's tech-focused Seattle headquarters in 2014.

Dragonchain Foundation

As stated by the SEC, $2.5 million worth of DRGNs were offered and sold between 2019 and 2022 by Dragonchain, the Dragonchain Foundation, and The Dragon Company to pay for business expenses and promote Dragonchain. The SEC contends that both the 2017 presale and the initial coin offering of Dragon tokens were unregistered crypto asset security offerings that purportedly garnered $14 million from more than 5,000 investors. This assertion is a vital part of the filing.

Many cryptocurrency start-ups used initial coin offerings (ICOs) to generate funds for their tokens during the Bitcoin (BTC) market boom towards the end of 2017. Initial coin offerings surpassed venture finance as the primary means of funding for blockchain start-ups at their height in 2017.

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Initial Coin Offering SEC Dragonchain Joe Roets
SEC Sues Dragonchain Founder For Unregistered Initial Coin Offering
Usha Yadav
Usha is a diehard crypto enthusiast and has been actively writing on different facets of the blockchain and crypto world. She has authored many research articles on cryptocurrency and aims to provide informational and quality content to readers. She firmly believes that crypto has a great potential to redefine the world of finance and blockchain.

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