(Bloomberg) -- The entities operating the troubled decentralized finance project Mango Markets settled US Securities and Exchange Commission charges of selling unregistered securities and acting as an broker.
Mango DAO, Blockworks Foundation and Mango Labs didn’t admit or deny the allegations, but agreed to pay nearly $700,000 in civil penalties. They also agreed to destroy their MNGO governance tokens, to request trading platforms to remove the tokens and “to refrain from soliciting any trading platform to allow trading in or offering or selling MNGO,” according to an SEC statement Friday. The settlements are subject to court approval.
In recent years, the SEC has filed cases against a slew of crypto projects and exchanges, including Coinbase Global Inc. and Binance Holdings, accusing them of facilitating trading in unregistered securities. The agency has also gone after decentralized projects, sending a Wells notice, threatening to sue, to Uniswap Labs, according to the decentralized exchange project. BarnBridge DAO settled with the SEC last year. Back in August, holders of MNGO, which is Mango Markets’ governance token, voted to approve a settlement with the SEC, even though the agency hadn’t yet charged the platform.
“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,” Jorge G. Tenreiro, acting chief of the Crypto Assets and Cyber Unit at the agency, said in the statement.
Starting in August 2021, Mango DAO, “a purportedly decentralized autonomous organization,” and Panama-based Blockworks Foundation raised more than $70 million from sales of MNGO tokens to investors worldwide, including in the US, the SEC said.
In April, a trader accused of exploiting Mango’s rules to steal $110 million was convicted of fraud in the first US trial involving criminal charges tied to cryptocurrency manipulation.
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