SEC Charges Mango DAO and Blockworks Foundation Over Unregistered Crypto Asset Sales

The US Securities and Exchange Commission announced on Sept. 27 that it charged Mango DAO and Blockworks Foundation for the offer and sale of unregistered crypto assets.

The US Securities and Exchange Commission (SEC) has charged decentralized autonomous organization (DAO) Mango DAO and Blockworks Foundation with the offer and sale of unregistered crypto assets.

According to the SEC’s complaint, filed on Sept. 27 in the US District Court for the Southern District of New York, the three entities violated US securities laws and the broker registration provisions.

The SEC alleges that Mango DAO and Blockworks Foundation, an entity registered in Panama, raised over $70 million from sales of MNGO tokens, a governance token of the Mango Markets platform. The sales, which began in August 2021, were offered to investors worldwide, including from the US.

The SEC says it has settled with the firms, which have agreed to injunctions and orders and will pay a total of $700,000 in civil penalties.

Destroy MNGO tokens As part of the settlement, Mango DAO, Mango Labs and the Blockworks Foundation will also destroy the MNGO tokens. The parties will also ask trading platforms to delist MNGO as well as not solicit any crypto exchanges in relation to allowing for the trading of MNGO tokens.

These injunctions and penalties will take effect once approved by the court.

Earlier this year, Mango Markets announced a $250,000 allocation in USD Coin (USDC) to help navigate the growing regulatory scrutiny it faced.

The platform had suffered a major exploit in October 2022, with the attacker draining over $100 million in digital assets from the platform. The hacker, Avraham Eisenberg, was later arrested and charged over the exploit.

However, that exploit appears to have shone the regulatory spotlight on Mango Markets, leading to the latest SEC charges and settlement. Mango Markets offered to have a settlement deal with the SEC in August.