Mango Markets Agrees to Destroy MNGO Tokens in SEC Settlement

Mango DAO, Mango Labs and Blockworks Foundation agreed to settle charges with the U.S. Securities and Exchange Commission Friday.

Mango Markets has agreed to destroy its MNGO tokens and ask crypto exchanges to stop trading the tokens, as part of a settlement with the U.S. Securities and Exchange Commission (SEC).

The SEC announced the settlement in a press release on Friday, alleging that the MNGO token was an unregistered security and that Mango DAO, Mango Labs LLC and Blockworks Foundation offered unregistered broker services.

The entities will pay $700,000 total as part of the settlement, which is still subject to a court's approval.

Mango DAO members vote on proposals through the MNGO governance token. It's unclear what the project's future will look like without the token.

The SEC's press release noted that Mango DAO and Blockworks Foundation (no relation to the news and events business) sold $70 million worth of MNGO tokens starting in August 2021.

As part of the settlement, Mango DAO, Blockworks Foundation and Mango Labs are neither admitting nor denying the charges.

In a statement, SEC Acting Crypto and Cyber Unit Chief Jorge Tenreiro said any entity that offers "securities-intermediary functions" needs to register or otherwise be exempt from registration with the SEC.

"Since the inception of our crypto enforcement program, our view has been that the label ‘DAO’ does not change the reality of who is behind a project, what activities they engage in, or whether their activities need to be registered. Nor does engaging in intermediation of securities with the aid of automated or open source software change the nature of such activities," he said in the statement.

Last year, Mango Markets – which has struggled to recover since Avraham Eisenberg drained more than $110 million worth of tokens from the exchange in 2022 – tried relaunching the decentralized trading venue. Eisenberg was convicted of fraud and market manipulation tied to his actions around Mango earlier this year, though his sentencing has been pushed to Dec. 12.