JUST IN: SEC Sues Altcoin and Cryptocurrency Company – Claims It’s a Security

The SEC is accusing Mango Markets entities of the unregistered offering and sale of “MNGO” governance tokens.

The U.S. Securities and Exchange Commission (SEC) has filed criminal charges against Mango DAO and Blockworks Foundation, accusing them of unregistered offerings and sales of “MNGO” tokens, the governance tokens of the Mango Markets cryptocurrency platform.

Additionally, the SEC filed charges against the Blockworks Foundation and Mango Labs for operating as unregistered intermediaries by facilitating trading of crypto assets, which are considered securities, on the platform.

According to the SEC’s complaint, Mango DAO, a decentralized autonomous organization (DAO), and the Panama-based Blockworks Foundation raised over $70 million through unregistered sales of MNGO tokens starting in August 2021. The tokens were sold to hundreds of investors, including U.S. residents.

The SEC also accused the Blockworks Foundation and Mango Labs of acting as unregistered intermediaries by encouraging users to trade securities on Mango Markets, providing investment advice, and assisting in executing securities transactions.

Jorge G. Tenreiro, Acting Director of the SEC’s Crypto Assets and Cyber Division, noted that the use of a DAO or automation does not exempt entities from securities regulations. “If you are engaged in securities brokerage functions, you must register or be exempt from it, regardless of the technology used and the type of legal entity used,” Tenreiro said.

The SEC’s lawsuit, filed in the U.S. District Court for the Southern District of New York, accuses the Mango DAO and Blockworks Foundation of violating the Securities Act of 1933, and the Blockworks Foundation and Mango Labs of violating the brokerage registration provisions of the Securities Exchange Act of 1934.

Without admitting or denying the allegations, the organizations agreed to settle the charges, collectively paying approximately $700,000 in restitution, destroying any remaining MNGO tokens, and requesting the removal of MNGO tokens from trading platforms.

They also agreed to stop soliciting any platforms to list the tokens. The deal is subject to court approval.

*This is not investment advice.