The U.S. Securities and Exchange Commission (SEC) has dismissed its lawsuit against Dragonchain

The U.S. Securities and Exchange Commission (SEC) has dismissed its lawsuit against Dragonchain, a blockchain platform

The U.S. Securities and Exchange Commission (SEC) has filed to dismiss its lawsuit against Dragonchain, a blockchain platform, showcasing a new approach by the agency to regulating the cryptocurrency sector.

The move comes as the SEC, under the current presidential administration, has been reassessing its digital assets policy.

What Happened: In August 2022, the SEC initiated legal action against Dragonchain for allegedly running unregistered securities offerings through its 2017 Initial Coin Offering (ICO) and subsequent token presales.

The SEC asserted that the Dragonchain token (DRGN) received $14 million from international investors and was classified as a security through applying the Howey Test.

On the other hand, the Dragonchain team maintained that the token was a utility token designed for use within the Dragonchain platform and not for investment purposes. Moreover, the company challenged the SEC’s application of the Howey Test to cryptocurrency assets and questioned the legal foundation of the agency’s claims.

In a joint filing on April 24, both parties requested that the case be dismissed with prejudice, which means it will not be refiled. The SEC attributed its decision to dismiss the case to the ongoing work of its Crypto Task Force, which clarifies how digital assets should be classified under federal securities laws.

The SEC’s recent action aligns with a policy shift from this government that has caused multiple significant cryptocurrency legislation reversals at the agency.

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Following the court decision to drop the lawsuit, Dragonchain’s native token experienced an immediate positive price response.

The case dismissal led to a 134% increase in the token’s value within 24 hours of the announcement, as investors returned their confidence in the project.

The token’s trading volume also skyrocketed by over 6000%, further highlighting the investors’ interest.

Despite this recent price surge, the token trades at a 98% lower value than its all-time high of $5.46.

The cryptocurrency market is known for its high volatility, especially due to regulatory uncertainty, making this swift increase significant.

Despite recent market gains, the Dragonchain token still faces hurdles in reaching its previous value. At press time, the token holds a market capitalization of $30.62 million.

The SEC’s decision to dismiss the lawsuit marks a broader shift within the agency regarding its crypto enforcement initiatives. The new leadership at the agency has been reassessing its stance on crypto regulation by, for example, shutting down cases that involved companies like Coinbase and Ripple.

These regulatory changes reflect President Trump’s initiatives to establish a friendly environment toward digital assets during his administration.