SEC Charges Mango DAO for Unregistered Crypto Token Sales

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dry announced today settled allegations against Mango DAO and Blockworks Foundation for unregistered offerings and sales of “MNGO” governance tokens on the Mango Markets platform.

The SEC complaint also points out 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 the management of clients’ funds and securities without the necessary registration required by law.

According to the SEC, Mango DAO and the Blockworks Foundation have raised more than $70 million from unregistered MNGO token sales since August 2021. These tokens, marketed as government tokens, were sold to hundreds of investors, including in the US, without complying federal securities laws. .

Jorge G. Tenreiro, acting head of the SEC’s Crypto Assets and Cyber ​​Unit, emphasized that naming a project a DAO or using automated software does not 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 used and the type of legal entity used,” Tenreiro said.

Without admitting or denying the allegations, Mango DAO, Blockworks Foundation and Mango Labs agreed to settle with the SEC. The three entities will pay a combined nearly $700,000 in civil penalties.

In addition, the companies agreed to destroy all MNGO tokens, request the removal of MNGO from trading platforms, and refrain from soliciting the sale or trading of tokens in the future. These regulations are pending court approval.

The SEC’s Crypto Assets and Cyber ​​Unit led the investigation, with litigation being handled by the Chicago Regional Office. The SEC continues to state that entities engaged in securities activities must follow registration protocols regardless of their structure or technology.

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