Regulatory organization, SEC, has Mango DAO and Blockworks Foundation agree to a $700k settlement deal
The US Securities and Exchange Commission (SEC) has reached a settlement with Mango DAO (also known as Mango Markets) and Blockworks Foundation over securities violation charges. The charges stem from the unregistered offering of crypto assets by the three entities.
According to the SEC, Mango DAO, Blockworks Foundation, and Mango Labs conducted an unregistered offer and sale of securities through their crypto asset offerings. The specific nature of the allegations centers on the claim that these entities solicited and sold securities without complying with SEC registration requirements.
The entities involved in this case are Mango DAO (Mango Markets), Blockworks Foundation, and Mango Labs. The charges align with the SEC’s broader “Project Crypto” initiative to regulate crypto offerings and ensure compliance with securities laws.
The settlement resolves the SEC’s charges against Mango DAO and Blockworks Foundation. Although the precise financial terms or penalties of the settlement are not detailed in the publicly available summaries, the SEC entered judgment against all three entities, signifying an official enforcement action had concluded, effectively settling the matter.
The charges are primarily related to the sale of unregistered MNGO tokens, Mango DAO's governance token, by both entities. These tokens raised more than $70 million from investors worldwide, including the US, starting in August 2021.
As part of the settlement, Mango DAO and Blockworks Foundation agreed to destroy their MNGO tokens and request their removal from trading platforms. They also agreed to refrain from soliciting any trading platform to allow trading in, offering, or selling MNGO.
The Mango Markets platform is a decentralized autonomous organization (DAO) operated by Mango Labs and Blockworks Foundation. The brokerage allegations include actively soliciting and recruiting users of Mango Markets to trade securities, providing advice and valuations as to the merits of an investment in securities, and helping to facilitate securities transactions on the Mango Markets platform.
The civil penalties paid by Mango DAO and Blockworks Foundation collectively amount to nearly $700,000, more than triple the reported potential settlement fees a month ago. Both Mango DAO and Blockworks Foundation have agreed to settle with the SEC for $700,000 in civil penalties without consenting to or denying the allegations.
Jorge G. Tenreiro, Acting Chief of the SEC's Crypto Assets and Cyber Unit, stated 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. The SEC's action against Mango DAO and Blockworks Foundation is a reminder to all crypto asset issuers and platforms to comply with securities laws and register with the SEC if necessary.
The SEC's statement emphasizes that regardless of the technology employed and the type of legal entity used, securities-intermediary functions must be registered or be exempt from doing so. This settlement serves as a significant step towards ensuring compliance with securities laws in the crypto asset space.
- Despite the label of 'DAO' used by Mango DAO (Mango Markets) and Blockworks Foundation, their activities in offering and selling securities, such as the MNGO tokens, without registering with the SEC violated securities laws, as emphasized by the SEC's action.
- The settlement between the SEC and Mango DAO (Mango Markets) and Blockworks Foundation involves civil penalties totaling nearly $700,000, a significant amount that signals a focus on ensuring compliance with securities laws in technology-based financial investing, such as cryptocurrency.
