SEC Charges Mango Markets Operators with $70M Unregistered Token Sale, Settles for $700K

Key Points

• SEC charges Mango DAO, Blockworks Foundation, and Mango Labs for unregistered offers and sales of MNGO tokens, raising over $70 million from investors worldwide.
• The entities agree to settle, paying nearly $700,000 in civil penalties and agreeing to destroy MNGO tokens and request their removal from trading platforms.
  

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SEC Cracks Down on Unregistered Crypto Operations

In a significant move against unregistered crypto asset operations, the U.S. Securities and Exchange Commission (SEC) has filed charges against multiple entities involved in the Mango Markets platform. The SEC’s action targets Mango DAO, Blockworks Foundation, and Mango Labs, LLC for various violations related to the offer and sale of MNGO tokens and unregistered broker activities.

Unregistered Token Sales and Broker Activities

The SEC’s complaint alleges that Mango DAO and Blockworks Foundation engaged in unregistered offers and sales of MNGO tokens, raising more than $70 million since August 2021. These tokens, marketed as governance tokens for the Mango Markets platform, were sold to hundreds of investors globally, including those in the United States.

Furthermore, Blockworks Foundation and Mango Labs are accused of operating as unregistered brokers. The SEC claims these entities actively solicited users for Mango Markets, provided investment advice, and facilitated securities transactions on the platform.

Settlement Details and Implications

Without admitting or denying the allegations, all three entities have agreed to settle the SEC charges. The settlement includes:

1. Collective payment of nearly $700,000 in civil penalties
2. Destruction of MNGO tokens
3. Requesting removal of MNGO tokens from trading platforms
4. Refraining from future solicitation or offering of MNGO tokens

This settlement, subject to court approval, marks a significant enforcement action in the crypto space. It underscores the SEC’s continued focus on bringing crypto operations under regulatory compliance, particularly those involving token sales and trading platform operations.