Mango DAO Settlement With SEC Finalized For $700,000 Fine
The SEC had charged that Mango DAO sold unregistered MNGO tokens and likewise sold unlicensed broker services via Mango Labs LLC and Blockworks Foundation.
The Mango DAO settlement terms include the entities destroying their MNGO tokens, requesting crypto exchanges to halt trading of the tokens, and paying $700,000 in penalties.
Under the settlement agreement which court approval still remains Mango DAO held pending a community vote in August to approve SEC settlement terms. Separately, in October 2023, Mango DAO reached a separate $500,000 settlement with the Commodity Futures Trading Commission (CFTC) to settle an investigation over related conduct.
The complaint filed by the SEC under the Securities Act of 1933 alleged that Mango DAO and the Blockworks Foundation had raised more than $70 million in August 2021 through the sale of the MNGO tokens to investors, including those in the United States. Mango Labs, on the other hand, was also declared an unregistered broker for soliciting users and providing financial advice in violation of the Securities Exchange Act of 1934.
Avraham Eisenberg Convicted for Exploiting Mango Markets
The Mango DAO settlement follows the highly publicized exploit of Mango Markets at the hands of Avraham Eisenberg, who manipulated the platform’s rules in 2022 to reap losses of over $110 million. Earlier this year, Eisenberg was convicted of fraud and market manipulation, pending sentencing scheduled for December 12.
But despite these legal hang-ups, the Mango Markets settlement represents something of a milestone in the broader regulatory crackdown on DeFi projects, in many ways, toward what is expected to be increased scrutiny regarding token offerings and platform operations throughout the
space.
