- Unregistered Sale of MNGO Tokens
- Charges of Operating as Unregistered Intermediaries
- SEC Response and Further Actions
The U.S. Securities and Exchange Commission (SEC) has filed criminal charges against Mango DAO and Blockworks Foundation for unregistered offerings and sales of MNGO tokens, the governance tokens of the Mango Markets cryptocurrency platform.
Unregistered Sale of MNGO Tokens
According to the SEC’s complaint, Mango DAO, a decentralized autonomous organization (DAO), and the Panama-based Blockworks Foundation raised over $70 million through unregistered sales of MNGO tokens starting in August 2021. The tokens were sold to hundreds of investors, including U.S. residents.
Charges of Operating as Unregistered Intermediaries
The SEC also accused the Blockworks Foundation and Mango Labs of acting as unregistered intermediaries by encouraging users to trade securities on Mango Markets, providing investment advice, and assisting in executing securities transactions.
SEC Response and Further Actions
The SEC's lawsuit, filed in the U.S. District Court for the Southern District of New York, accuses the Mango DAO and Blockworks Foundation of violating the Securities Act of 1933, and the Blockworks Foundation and Mango Labs of violating the brokerage registration provisions of the Securities Exchange Act of 1934. Without admitting or denying the allegations, the organizations agreed to settle the charges, collectively paying approximately $700,000 in restitution, destroying any remaining MNGO tokens, and requesting the removal of MNGO tokens from trading platforms. They also agreed to stop soliciting any platforms to list the tokens. The deal is subject to court approval.
This case highlights the importance of adhering to regulatory requirements when dealing with crypto assets and platforms related to securities.
