- The SEC has charged Mango DAO and Blockworks Foundation for unregistered sales of MNGO tokens
- The entities raised $70 million without registering their token sales, violating securities laws
- Mango DAO, Blockworks Foundation, and Mango Labs have agreed to pay penalties and destroy the tokens
The U.S. Securities and Exchange Commission (SEC) announced on Friday charges against Mango DAO and Blockworks Foundation for raising over $70 million through unregistered offers of MNGO tokens. These tokens were marketed as governance tokens on the Mango Markets crypto platform, which the SEC said counted as securities given the expectation of profits. The entities, including Mango Labs, have also been charged for acting as unregistered brokers, offering investment advice and facilitating securities transactions without proper registration.
Crypto Entities Skirt SEC Regulations
According to the SEC’s complaint, Mango DAO and Blockworks Foundation have been operating without adhering to federal securities registration requirements since 2021. By bypassing these critical legal provisions, the companies deprived investors of essential protections.
The agency charged Mango DAO and Blockworks Foundation with violations of the securities offering registration provisions of the Securities Act of 1933 and charged Blockworks Foundation and Mango Labs with violations of the broker registration provisions of the Securities Exchange Act of 1934.
Penalties and Compliance Measures
Mango DAO, Blockworks Foundation, and Mango Labs agreed to settle the charges by collectively paying nearly $700,000 in civil penalties as well as destroying the MNGO tokens, request their removal from trading platforms, and halt any further solicitation of these tokens for trading. The settlements are pending court approval.
Jorge Tenreiro, Acting Chief of the SEC’s Crypto Assets Unit, warned that “The use of decentralized autonomous organizations (DAOs) or open-source software doesn’t exempt entities from regulatory scrutiny,” something the SEC has demonstrated in the past with prior actions.
