Mango Markets Agrees to $700,000 SEC Fine, Token Destruction

Mango Markets, as represented by three constituent entities, has agreed to settle with the SEC for unregistered token sales charges. Mango must pay $700,000 and destroy all MNGO tokens.

Mango is also seeking to reach a similar settlement with the CFTC.

The SEC’s Settled Charges

This news comes from a recent SEC press release detailing the terms of this settlement agreement. The SEC charged Mango DAO, Blockworks Foundation, and Mango Labs LLC as joint participants in unregistered broker activities and illegal token sales. In particular, it adds that the unregistered sale of MNGO tokens and other illicit offers raised $70 million.

The SEC specified that these three entities that control Mango Markets neither admit nor deny any allegations. Blockworks Foundation is noted to be a Panamanian firm, but more attention is paid to Mango’s structure. The SEC referred to Mango DAO as a “purportedly decentralized autonomous organization,” subtly disparaging the project’s governance model.

“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,” said Jorge G. Tenreiro, Acting Chief of the Crypto Assets and Cyber Unit.

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Per the settlement terms, these three entities are liable to pay nearly $700,000 in fines. Additionally, they must destroy all MNGO tokens and work proactively to ensure that other trading platforms do not continue selling them. Even still, these agreements require further approval from the courts.

Mango’s Troubled Background

Unfortunately for Mango Markets, these SEC charges are not the only ones it faces. According to Bloomberg, the three entities have attracted regulatory attention since a notorious $110 million fraud. Bloomberg noted that Mango DAO pre-emptively voted in August to cooperate with any potential SEC settlements, even though charges have only been announced today.

Read More: Crypto Regulation: What Are the Benefits and Drawbacks?

The SEC took a special interest in this fraud case while it was still ongoing, and regulators’ eyes have been on Mango Markets since. In fact, Mango DAO also overwhelmingly voted to pre-emptively offer another settlement. Referring to ongoing investigations from the SEC, CFTC and DOJ, Mango DAO proposed to offer a $500,000 settlement to cease the CFTC’s.

Although this vote was apparently unanimous, the CFTC has not publicly agreed to it, and little news exists about the DOJ investigation. Regardless of the outcome, it will be extremely difficult for Mango Markets to recover from these public investigations.