SEC charges Mango DAO for unregistered crypto token sales
Key Takeaways
- Mango DAO and Blockworks Foundation raised over $70 million from unregistered MNGO token sales.
- The SEC mandates destruction of all MNGO tokens and halts their trading.
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The SEC announced settled charges today, against Mango DAO and Blockworks Foundation for unregistered offers and sales of the “MNGO” governance tokens on the Mango Markets platform.
The SEC’s complaint also highlights that Blockworks Foundation and Mango Labs operated as unregistered brokers, soliciting users, providing investment advice, and facilitating securities transactions on the Mango Markets platform. They were involved in handling customer funds and securities without the necessary registration required by law.
According to the SEC, Mango DAO and Blockworks Foundation raised over $70 million from unregistered sales of MNGO tokens since August 2021. These tokens, marketed as governance tokens, were sold to hundreds of investors, including in the US, without adhering to federal securities laws.
Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets and Cyber Unit, emphasized that calling a project a DAO or using automated software doesn’t exempt entities from securities regulations.
“If you engage in securities-intermediary functions, you must register or be exempt from doing so, regardless of the technology employed and the type of legal entity used,” Tenreiro stated.
Without admitting or denying the charges, Mango DAO, Blockworks Foundation, and Mango Labs agreed to settle with the SEC. The three entities will collectively pay nearly $700,000 in civil penalties.
Additionally, the companies have agreed to destroy all MNGO tokens, request the removal of MNGO from trading platforms, and refrain from soliciting the sale or trading of the tokens in the future. These settlements are pending court approval.
The SEC’s Crypto Assets and Cyber Unit led the investigation, with litigation handled by the Chicago Regional Office. The SEC continues to assert that entities engaged in securities activities must follow registration protocols, regardless of their structure or technology.
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Author: Estefano Gomez
