2017 ICOs aren't over yet: SEC files suit against Dragonchain and its founder

cointelegraph.com:

The United States Securities and Exchange Commission, or SEC, has filed a complaint related to a 2017 initial coin offering from a blockchain project originally developed by the Walt Disney Company.

In a Tuesday notice, the SEC said it had charged Dragonchain, the Dragonchain Foundation, the Dragon Company, and their founder John Joseph Roets for raising $16.5 million in a presale and initial coin offering from 2017. According to the financial regulator, Roets, Dragonchain, and the Dragonchain Foundation allegedly conducted an unregistered offering of the blockchain’s DRGN tokens in an August 2017 presale and an October and November 2017 ICO, raising $14 million. All three entities and their founder also allegedly sold $2.5 million worth of DRGNs “to cover business expenditures to further develop and market Dragonchain technology” from 2019 to 2022.

Before Dragonchain’s offering, the SEC released a report in July 2017 urging companies to register with the government agency, suggesting it planned to consider many ICOs as securities offerings subject to applicable laws. The commission said it would be seeking “permanent injunctions, disgorgement with prejudgment interest, civil penalties against and conduct-based injunctions” against Roets and the three entities based on alleged violations of the Securities Act of 1933.

According to a letter from May 2022 posted to Dragonchain’s Twitter account on Tuesday, Roets knew the SEC intended to pursue charges related to the sale of unregistered securities before the statute of limitations expired. He criticized the government agency for having a seemingly outdated approach to regulating crypto.

“The SEC is picking and choosing projects to target, often singling out the ones with the