The SEC has filed a lawsuit against Mango DAO and Blockworks Foundation, marking a significant action in the cryptocurrency ecosystem. SEC Chairman Gensler previously stated that necessary measures would continue against those who disregard regulations. The recent announcement highlights concerns surrounding the MNGO Token, which has been in the spotlight due to a hacking incident.
Details of the SEC Lawsuit
The lawsuit against Blockworks Foundation and Mango Labs LLC pertains to various cryptocurrencies that were offered and sold as securities on the Mango Markets platform. The SEC, which has also filed similar lawsuits against several other platforms including Coinbase and Binance, accuses the parties of raising $70 million from token sales since August 2021.
Accusations Against the Decentralized Structure
The SEC has labeled the DAO’s decentralized structure as “pseudo,” asserting that the sales to hundreds of investors constitute a violation. Jorge G. Tenreiro, acting head of the Crypto Assets and Cyber Unit, emphasized that despite the decentralized label, the fundamentals of the project remain unchanged, reinforcing their stance against DeFi and DAO structures.
“Since the inception of our crypto enforcement program, we have maintained that the label ‘DAO’ does not alter the reality of who is behind a project, what activities they are engaged in, or whether their activities need to be registered.”
In the lawsuit filed in the U.S. District Court for the Southern District of New York, Mango DAO, Blockworks Foundation, and Mango Labs agreed to pay a $700,000 penalty. They also consented to the removal of MNGO Tokens from the platform.
