The U.S. Securities and Exchange Commission has levied charges against Mango DAO and Blockworks Foundation for unregistered token sales of MNGO and unregistered broker activities associated with the Mango Markets platform, which they have all agreed to settle.
Mango DAO, a decentralized autonomous organization, and the Blockworks Foundation, based in Panama, have allegedly raised more than $70 million through the issuance of MNGO tokens starting in August 2021, the SEC claims.
Mango Agrees To Penalties
The SEC has said that the entities failed to follow the federal registration rules intended to protect investors. In the course of the settlement, Mango DAO, Blockworks Foundation, and Mango Labs agreed to destroy their MNGO tokens and incur almost $700,000 in penalties.
The entities will also insist that the tokens be withdrawn from trading markets and have committed to not asking for future MNGO token trades. The parties resolved the dispute without admi**,**tion or denial of the SEC’s accusations.
The governance tokens used by holders to impact the function of Mango Markets, a cryptocurrency trading platform, were MNGO tokens. The settlement occurs following other regulatory hurdles the platform has encountered, including a 2022 hack by Avraham Eisenberg that caused losses totaling $116 million.
As a reaction to U.S. regulatory examinations, MNGO Markets has earmarked $250,000 in USD Coin (USDC).
Also, the SEC indicted MNGO DAO, Blockworks Foundation, and MNGO Labs for representing unregistered brokers, insisting they brought users to trade on MNGO Markets and rendered advice on investment opportunities without appropriate registration.
The case is comparable to charges the SEC made against Rari Capital and its founders for unregistered securities offerings involving crypto assets exceeding $1 billion.
The SEC’s initiatives confirm the need for organizations issuing securities to become registered and adhere to investor protection statutes.
