Mango Markets Settles SEC Charges, Pays $700K Fine, Destroys Tokens

Mango Markets, represented by three associated entities, has reached an agreement to settle with the SEC regarding charges of unregistered token sales. Mango is required to pay $700,000 and eliminate all MNGO tokens.

Mango is also working towards a similar settlement with the CFTC.

The SEC’s Settled Charges

This information comes from a recent SEC press release outlining the details of this settlement. The SEC charged Mango DAO, Blockworks Foundation, and Mango Labs LLC for their involvement in unregistered broker activities and illegal token sales. Specifically, it highlighted that the unregistered sale of MNGO tokens and other unlawful offers generated $70 million.

The SEC clarified that these three entities managing Mango Markets neither admit nor deny the allegations. While Blockworks Foundation is identified as a Panamanian company, the SEC focused on Mango’s organizational structure, characterizing Mango DAO as a “purportedly decentralized autonomous organization,” subtly questioning the project’s governance framework.

“Since the launch of our crypto enforcement program, we have maintained that the label ‘DAO’ does not alter the reality of who is behind a project, what activities they participate in, or whether those activities require registration,” stated Jorge G. Tenreiro, Acting Chief of the Crypto Assets and Cyber Unit.

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According to the settlement terms, these three entities must pay nearly $700,000 in penalties. Additionally, they are mandated to destroy all MNGO tokens and actively ensure that other trading platforms cease their sale. Nonetheless, these agreements still require court approval.

Mango’s Troubled Background

Sadly for Mango Markets, these SEC charges are not their only challenges. As reported by Bloomberg, the three entities have caught regulatory attention since a notable $110 million fraud incident. Bloomberg noted that Mango DAO proactively voted in August to cooperate with any possible SEC settlements, despite the charges only being disclosed today.

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The SEC took a keen interest in the fraud case while it was still active, leading to ongoing scrutiny of Mango Markets. Indeed, Mango DAO also largely voted to offer another settlement in advance. Citing ongoing investigations from the SEC, CFTC, and DOJ, Mango DAO suggested a $500,000 settlement to resolve the CFTC’s inquiry.

Although this vote seemingly received unanimous support, the CFTC has not publicly confirmed it, and information regarding the DOJ investigation remains scarce. Regardless of the developments, it will be incredibly challenging for Mango Markets to recover from these public inquiries.