- Unregistered Token Sales Under Fire
- SEC’s Actions
- Settling the Case
These tokens were used as governance tokens for Mango Markets, a platform for trading digital assets. Let’s discover more about this case from the Mango DAO.
Unregistered Token Sales Under Fire
The SEC also charged Blockworks Foundation and Mango Labs LLC with acting as unregistered brokers. Both organizations allegedly recruited people to trade securities on Mango Markets without registering as brokers, which is required by law. The SEC claims these groups endangered investors by not registering, removing key protections under federal securities laws.
SEC’s Actions
The SEC is cracking down on these kinds of actions to protect investors. According to the SEC, by avoiding the registration process, Mango DAO, Blockworks Foundation, and Mango Labs deprived investors of important protections, leaving them in the dark about potential risks. The SEC filed the case in the U.S. District Court for the Southern District of New York. The charges against Mango DAO and Blockworks Foundation relate to violations of the Securities Act of 1933, which sets the rules for offering securities. The charges against Blockworks Foundation and Mango Labs relate to the Securities Exchange Act of 1934, which regulates brokers.
Settling the Case
Without admitting or denying the SEC’s claims, Mango DAO, Blockworks Foundation, and Mango Labs agreed to settle the charges. The groups will pay nearly $700,000 in penalties. They also agreed to destroy their MNGO tokens, remove them from trading platforms, and stop offering or selling MNGO tokens in the future. However, these settlements still need approval from the court.
This case highlights the importance of adhering to laws and regulations when offering securities on the market and protecting investors' rights. The SEC’s actions remind all market participants of the necessity to follow established rules.
