SEC Charges Mango DAO and Blockworks Foundation
The Securities and Exchange Commission (SEC) has charged Mango DAO and Blockworks Foundation for the unregistered sale of ‘MNGO’ tokens and unregistered broker activity related to the Mango Markets platform. According to the SEC, Mango DAO and Blockworks Foundation raised over $70 million from the sale of MNGO tokens, starting in August 2021. The SEC alleged that these entities circumvented investor protections by avoiding federal registration rules.
Mango Markets Regulatory Challenges
Mango Markets recently allocated $250,000 in USD Coin (USDC) to address U.S. regulatory scrutiny following a series of challenges, including a 2022 Avraham Eisenberg hack that resulted in significant losses. Crypto lawyer Bill Hughes suggested that Eisenberg’s hack and subsequent conviction brought more scrutiny to the project, resulting in settled SEC charges and a monetary fine.
Unregistered Brokers and SEC Charges
The SEC also charged Blockworks Foundation and Mango Labs LLC for acting as unregistered brokers by recruiting users to trade on Mango Markets and providing advice on investment opportunities without the necessary regulatory registration. Similarly, Rari Capital and its co-founders were charged for conducting unregistered securities offerings through investment products holding over $1 billion in crypto assets. Entities offering securities must register with the SEC to ensure investor protections and adhere to strict disclosure rules and regulations.
