The US Securities and Exchange Commission has announced a settlement with Mango DAO, Mango Labs LLC, and Blockworks Foundation, resolving allegations that the MNGO token constituted an unregistered security and that the entities provided unregistered broker services. As part of the agreement, the entities will destroy their MNGO tokens, request that cryptocurrency exchanges cease trading the tokens, and pay a total of $700,000, pending court approval.
This development comes after Mango DAO members voted in favor of adopting the settlement proposal, and the DAO also recently voted on a settlement proposal with the Commodity Futures Trading Commission. The future of the project remains uncertain without the MNGO governance token, which was used by Mango DAO members to vote on proposals. According to the SEC, Mango DAO and Blockworks Foundation sold $70 million worth of MNGO tokens starting in August 2021. The settlement does not require the entities to admit or deny the charges.
In a statement, SEC Acting Crypto and Cyber Unit Chief Jorge Tenreiro emphasized that any entity providing securities-intermediary functions must register or be exempt from registration with the SEC. He noted that the use of automated or open-source software does not change the nature of such activities, and the label 'DAO' does not exempt projects from registration requirements.
This settlement follows a challenging period for Mango Markets, which has struggled to recover since a major exploit in 2022, and the recent conviction of Avraham Eisenberg for fraud and market manipulation related to the incident.