Mango Markets Inks Major Settlement Agreement With the US SEC

Mango Markets has finally resolved its securities lawsuit with the US SEC, a move that will see it phase out the MNGO tokens

To resolve a lawsuit filed by the U.S. Securities and Exchange Commission (SEC), Mango DAO, Mango Labs, and Blockworks Foundation have settled. 

Per the lawsuit, the SEC accused the entities of offering unregistered security through MNGO tokens and operating illegal brokerage services. These services involved soliciting users and facilitating securities transactions without proper regulatory approval.

Mango Markets to Burn MNGO Tokens in SEC Settlement 

The settlement, still awaiting court approval, demands the destruction of the MNGO tokens. 

In addition, $700,000 in penalties will be paid, and crypto exchanges will be asked to halt the token’s trades. Notably, Mango DAO’s agreement to the SEC’s settlement proposal stems from a vote held by Mango DAO members last week.

Interestingly, the DAO had already voted on a similar settlement with the Commodity Futures Trading Commission (CFTC), which passed unanimously. 

This highlighted the unique governance structure of Mango DAO. Members make key decisions through votes using the MNGO governance token. Notably, the project’s future remains uncertain without the token at the core of its governance system.

Meanwhile, Mango DAO, Mango Labs, and Blockworks Foundation have decided not to interrupt the SEC’s settlement proposal. They are neither denying nor admitting the allegations brought against them. 

The SEC’s action reflects its firm stance that DAOs and other crypto projects, including Robinhood and Coinbase are not exempt from federal securities laws. This is regardless of the technology or decentralized structures they employ. Acting Crypto and Cyber Unit Chief Jorge Tenreiro reiterated this in a statement released. 

Mango Markets’ Struggles

Mango Markets has had its fair share of legal challenges. In August 2023, Mango DAO settled with the SEC, paying $670,000. The SEC had accused Mango Markets of breaching securities laws by selling MNGO tokens as unregistered securities. This resolution marked the end of an investigation that also uncovered violations during the 2021 token sale of MNGO.

Amid these legal battles, Mango DAO has been grappling with the aftermath of Avraham Eisenberg’s actions in 2022. His exploits led to the siphoning of over $110 million in tokens from Mango Markets, causing significant harm to the platform.

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