These charges arise from the unregistered offer and sale of MNGO tokens. These tokens were used as governance tokens for Mango Markets, a platform for trading
The U.S. Securities and Exchange Commission (SEC) has filed settled charges against Mango DAO and Blockworks Foundation for engaging in the unregistered offer and sale of crypto assets called “MNGO” tokens, the SEC announced on Friday (Sept. 27).
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Mango DAO, a decentralized autonomous organization (DAO), and Blockworks Foundation, a foundation that was created to support Blockworks, a crypto media and events company, raised over $70 million from the sale of MNGO tokens, which were used as governance tokens for Mango Markets, a platform for trading digital assets.
According to the SEC, Mango DAO and Blockworks Foundation engaged in a common enterprise to offer and sell MNGO tokens to hundreds of investors around the world, including many in the United States, beginning in August 2021. The SEC alleges that these sales were part of a continuous and related offering that was not registered with the SEC, as required by the Securities Act of 1933.
The SEC’s complaint also alleges that Blockworks Foundation and Mango Labs, a limited liability company that operated Mango Markets, acted like brokers without registering with the SEC, as required by the Securities Exchange Act of 1934. According to the SEC, Blockworks Foundation and Mango Labs helped customers open accounts on Mango Markets, provided advice about investing in digital assets on the platform, and even handled customer funds.
The SEC alleges that Mango DAO, Blockworks Foundation, and Mango Labs failed to provide investors with the full and fair disclosure that is required by federal securities laws, and that their actions deprived investors of important protections.
Without admitting or denying the SEC’s claims, Mango DAO, Blockworks Foundation, and Mango Labs have agreed to settle the charges. Mango DAO and Blockworks Foundation will each pay a civil penalty of $348,437. Mango Labs will pay a civil penalty of $1,933.
In addition to the civil penalties, Mango DAO, Blockworks Foundation, and Mango Labs have agreed to destroy their MNGO tokens, remove the tokens from trading platforms, and stop offering or selling MNGO tokens in the future.