Thomas Daniels
The U.S. Securities and Exchange Commission (SEC) has charged Mango DAO and Blockworks Foundation with conducting an unregistered sale of MNGO tokens and operating as unregistered brokers on the Mango Markets platform. The Panama-based Blockworks Foundation and Mango DAO, a decentralized autonomous organization, allegedly raised over $70 million through the sale of MNGO tokens, bypassing investor protections by evading federal registration requirements.
MNGO tokens functioned as governance tokens, enabling holders to influence decision-making on the Mango Markets platform—a digital asset trading platform. As part of the settlement, Mango DAO and its affiliates agreed to destroy all MNGO tokens, pay nearly $700,000 in fines, and remove the tokens from trading platforms. Additionally, they committed to ceasing any future solicitation for MNGO trading.
This settlement follows a broader regulatory crackdown, including scrutiny stemming from a $116 million hack by Avraham Eisenberg in 2022. Crypto lawyer Bill Hughes highlighted that this incident may have intensified regulatory oversight, ultimately contributing to the SEC’s enforcement actions.
In addition to token-related charges, the SEC accused Blockworks Foundation and Mango Labs LLC of acting as unregistered brokers. These entities allegedly recruited users to trade on the platform and provided advisory services, further violating federal securities laws. Similar enforcement actions were taken by the SEC against Rari Capital and its co-founders, charged in September 2023 for unregistered securities offerings involving over $1 billion in crypto assets.
This case underscores the SEC’s continued focus on enforcing regulatory compliance in the rapidly evolving digital asset space, particularly regarding unregistered securities and brokerage activities.
