Mango DAO and Blockworks Foundation agree to SEC settlement of $700,000 and delisting MNGO.
On September 27, the U.S. Securities and Exchange Commission (SEC) reached a settlement with the decentralized autonomous organization (DAO) behind Mango Markets and the Blockworks Foundation. The SEC had accused both entities of selling unregistered securities following a $100 million exploit on Mango Markets in 2022, which led to increased regulatory focus on the platform.
As part of the settlement, Mango DAO and the Blockworks Foundation agreed to pay $700,000 in civil penalties, destroy their MNGO tokens, and request that cryptocurrency exchanges delist those tokens. Additionally, both entities committed to halting any future promotion or marketing of the tokens. The settlement does not require either party to admit or deny the SEC’s allegations, pending court approval. This agreement followed a community vote by Mango DAO to settle with the SEC in August.
In a separate development, Mango Markets also proposed a $500,000 settlement with the Commodity Futures Trading Commission (CFTC) in September, aiming to end its investigation without admitting any wrongdoing.
The SEC’s complaint accused Mango DAO and the Blockworks Foundation of violating the Securities Act of 1933 by raising over $70 million in August 2021 through the sale of MNGO governance tokens, which were available to U.S. investors. Mango Labs was additionally charged with operating as an unregistered broker by soliciting users for the platform and offering financial advice, breaching the Securities Exchange Act of 1934.
The SEC emphasized that identifying as a DAO or using decentralized, open-source technologies does not exempt entities from adhering to securities laws. This case is part of broader efforts by regulators to bring decentralized finance platforms under existing securities regulations.
