On Friday, Mango DAO, Mango Labs LLC, and Blockworks Foundation reached a settlement with the U.S. Securities and Exchange Commission (SEC) over allegations related to the MNGO token.
The SEC accused these entities of offering MNGO as an unregistered security and providing unregistered broker services. As part of the settlement, Mango DAO and its affiliates agreed to destroy their MNGO tokens and request that crypto exchanges cease trading the tokens. Additionally, they will pay a total of $700,000, although the agreement is still pending court approval, according to an SEC press release.
This settlement follows a recent vote by Mango DAO members on whether to accept the SEC’s settlement proposal. The DAO had also unanimously approved a separate settlement with the Commodity Futures Trading Commission (CFTC) earlier in the week.
Mango DAO members participate in governance through the MNGO token, raising questions about the project’s future without it. The SEC noted that Mango DAO and Blockworks Foundation (unrelated to the news and events company) had sold $70 million worth of MNGO tokens starting in August 2021.
As part of the agreement, Mango DAO, Blockworks Foundation, and Mango Labs did not admit or deny the charges. Jorge Tenreiro, Acting Chief of the SEC’s Crypto and Cyber Unit, emphasized that any entity providing “securities-intermediary functions” must register with the SEC or qualify for an exemption. He stated that simply labeling a project as a DAO or using open-source software does not exempt it from regulatory requirements.
Mango Markets has faced challenges since 2022, when Avraham Eisenberg exploited the platform, draining over $110 million in tokens. Although Mango Markets attempted to relaunch its decentralized trading platform, Eisenberg was later convicted of fraud and market manipulation. His sentencing is scheduled for December 12 of this year.
