- SEC announced it settled with Mango Markets over sale of unregistered tokens in $70 million coin offering
- Mango DAO, Blockworks Foundation have agreed to pay $700,000 in civil penalties.
- The settlement will also see Mango Markets destroy the MNGO tokens and request exchanges to delist them.
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.
SEC’s charges relate to the sale of MNGO, the governance token of Mango Markets. The platforms also acted as unregistered brokers for the DeFi platform.
In its complaint filed at the US District Court for the Southern District of New York, SEC alleged the three entities had violated US securities laws and the broker registration provisions.
According to the SEC, Mango DAO and Blockworks Foundation, an entity registered in Panama, raised over $70 from sales of MNGO tokens. The sales, which started 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.
Mango Markets hack
Earlier this year, Mango Markets announced a $250,000 allocation in USDC, with the funds set aside 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.
