Mango DAO and Blockworks Foundation face SEC settlement
Unregistered MNGO token sales.
The US Securities and Exchange Commission (SEC) has reached a settlement with Mango DAO and Blockworks Foundation regarding the unregistered sale of MNGO tokens, which are classified as securities. The settlement also addresses charges against Mango Labs for functioning as an unregistered broker in connection with various crypto assets on the Mango Markets platform. The SEC’s complaint asserts that these entities deprived investors of crucial protections guaranteed by federal securities laws by avoiding necessary registration requirements.
The SEC reports that Mango DAO and Blockworks Foundation raised more than $70 million from unregistered sales of MNGO tokens beginning in August 2021, targeting investors globally, including those in the US. The agency alleges that Blockworks Foundation and Mango Labs operated as unregistered brokers by soliciting users to trade securities, offering investment advice, and facilitating transactions on the Mango Markets platform.
Jorge Tenreiro, Acting Chief of the SEC’s Crypto Assets and Cyber Unit, emphasised that being labelled a decentralised autonomous organisation does not exempt entities from registration requirements. As part of the settlement, Mango DAO, Blockworks Foundation, and Mango Labs have agreed to pay nearly $700,000 in civil penalties, destroy their MNGO tokens, and stop soliciting trading for these tokens, pending court approval. The investigation and litigation were overseen by members of the SEC’s Crypto Assets and Cyber Unit.