The Mango DAO, along with Mango Labs LLC and Blockworks Foundation, have agreed to settle the charges with the US Securities and Exchange Commission (SEC) on Friday. As part of the settlement, the entities have collectively agreed to pay a hefty fee of $700,000. Further, they agreed to destroy the token MNGO, stop its trading, and refrain from marketing the tokens to exchanges in the future.
Settlement with SEC
According to an official press release from the SEC, Mango Markets' token was alleged to be an unregistered security. It had been offering unregistered broker services in connection with various crypto assets. The SEC implied that by deviating from its regulations, investors are deprived of protection.
SEC Allegations
The SEC alleged that the Mango DAO, which started in August 2021, had raised over $70 million from unregistered offers and sales of its tokens to investors worldwide, including the US. Blockworks Foundation and Mango Labs also operated as unregistered brokers, facilitating transactions on the Mango Markets platform by handling customer funds and securities. In the complaint filed by the SEC, Mango DAO and Blockworks Foundation were charged with securities violations offering registration provisions under the Securities Act of 1933. The SEC also charged Blockworks Foundation and Mango Labs with broker registration provisions violations under the Securities Exchange Act of 1934.
Impact on Participants
As a result of the settlement, the participating entities – Mango DAO, Mango Labs LLC, and Blockworks Foundation – have agreed to stop trading the MNGO token and destroy it. They also commit to refraining from marketing their tokens to exchanges in the future.
This settlement highlights the importance of adhering to SEC regulations to ensure investor protection. It serves as a warning to other organizations and platforms operating in the crypto assets space.
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