Mango DAO, Blockworks Foundation agree to settle SEC claims for $700,000 and delist MNGOs
On September 27, the U.S. Securities and Exchange Commission (SEC) confirmed charges against Mango Market’s Decentralized Autonomous Organization (DAO) and Blockworks Foundation.
The watchdog accused both companies of selling unregistered securities following Mango Markets’ $100 million exploit in 2022, which led to increased regulatory scrutiny of the platforms.
Under the terms of the settlement, Mango DAO and the Blockworks Foundation agreed to pay civil penalties totaling $700,000, destroy MNGO tokens, and request that cryptocurrency exchanges delist the tokens. Additionally, both companies will stop marketing tokens in the future.
The settlement does not require either party to admit or deny the SEC’s claims and is pending court approval. This comes after Mango DAO passed a community vote to settle with the SEC last August.
Also a month later, in September, Mango Markets offered a separate $500,000 settlement with the Commodity Futures Trading Commission (CFTC) to end the regulator’s investigation, again without admitting any wrongdoing.
charge
The SEC’s complaint alleged that Mango DAO and Blockworks Foundation violated the Securities Act of 1933 by selling MNGO governance tokens to investors, including U.S. residents, raising more than $70 million in August 2021.
Mango Labs is also named in the complaint as an unregistered broker, and the SEC accuses the company of soliciting users for the Mango platform and providing financial advice in violation of the Securities Exchange Act of 1934.
According to the SEC statement:
“We have argued that the ‘DAO’ label does not exempt any company from securities laws.”
The regulator added that the use of automated systems and open source technology does not change the legal liability of those running the projects.
The Mango Markets case highlights ongoing regulatory efforts to bring decentralized platforms under the purview of existing securities laws as the SEC continues to increase enforcement in the cryptocurrency industry.