The U.S. Securities and Exchange Commission (SEC) is going after yet another initial coin offering (ICO) project that raised millions during the ICO mania of 2017. This time, it’s Dragonchain, a project that raised $14 million in its ICO, but the founders say they are being targeted as the SEC seeks to protect the existing tech giants.

In its complaint filed on August 16 before the Western District of Washington in Seattle, the SEC accuses Dragonchain of engaging in selling unregistered securities through its coin offering.

The project allegedly minted DRGN tokens in 2017 and sold 55% of the total supply in two phases—a discounted presale in August to select investors and an ICO to the wider public. It raised $14 million through these efforts.

Then, from 2019 to 2022, the project raised $2.5 million by selling additional DRGN tokens to investors, claiming the proceeds would cover business expenditures and further develop its technology.

While selling the tokens, the company told investors that the value of DRGN would increase as its technology matured. The founders claimed that they would work on furthering the technology and that this would directly push the value of the token. They would also work to get the token listed on several exchanges, boosting the price. The SEC also alleges that the project paid influencers to drive hype to the tokens.

Dragonchain violated securities regulations by offering unregistered securities, the SEC alleges. In its complaint, it named Dragonchain Foundation, Dragonchain Inc., the Dragon Company as well as founder and chief developer Joseph Roets as defendants.

The SEC is seeking disgorgement of all the ill-gotten gains from the unregistered securities offerings plus prejudgment interest thereof, civil monetary penalties against the defendants and a permanent injunction against the defendants, prohibiting them from participating in any digital asset securities offerings.

However, Roets has disputed the allegations and accused the SEC of witch hunting.

“Many in the industry have had similar experiences and as a result have the impression that the SEC is picking and choosing projects to target, often singling out the ones with the biggest opportunity to disrupt incumbent interests, while giving a free pass to others. The commission is trying to shoehorn software technology into incompatible securities law from the 1930’s,” he said in a letter that preceded the SEC action.

Watch: SEC Commissioner Hester Peirce on Bitcoin Association’s Blockchain Policy Matters

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