The companies that run the decentralized finance project that has been in trouble, Mango Markets, settled US Securities and Exchange Commission allegations of selling securities that were not registered and acting as brokers.
Mango DAO, Blockworks Foundation, and Mango Labs didn’t admit or acknowledge these allegations. However, they agreed to pay close to $700,000 in civil penalties. Additionally, they agreed to remove the MNGO Governance tokens, ask trading platforms to eliminate the tokens, and “refrain from soliciting any trading platform to allow trading in or offering or selling MNGO,” according to an SEC statement issued on Friday. The settlements require court approval.
In recent years, the SEC has filed lawsuits against a myriad of crypto exchanges and crypto projects, such as Coinbase Global Inc. and Binance Holdings, accusing them of facilitating trading in non-registered securities. The agency also went after decentralized companies, delivering a Wells notice with threats to sue Uniswap Labs, like the decentralized exchange project. Bainbridge DAO settled with the SEC in the year prior. In August, holders of MNGO, which is Mango Markets’ governance token, were able to vote in favor of an agreement with the SEC even though the agency had not yet charged the platform with any fees.
Since the inception of our crypto enforcement program, our view has been that the label ‘DAO’ does not change the reality of who is behind a project, what activities they engage in, or whether their activities need to be registered,” Jorge G. Tenreiro who is the acting head of the Crypto Assets and Cyber Unit within the agency, said in the report.
Beginning in August 2021, Mango DAO, “a purportedly decentralized autonomous organization,” as well as Panama-based Blockworks Foundation, raised more than $70 million through the sale of MNGO tokens to investors across the globe, including the US, the SEC declared.
The news broke in April when a trader who was accused of using Mango’s rules to gain $110 million was found guilty of fraud during the first US trial of criminal charges relating to manipulation of cryptocurrency.
