The U.S. Securities and Exchange Commission (SEC) has charged the Solana-based decentralized finance (DeFi) platform Mango Markets with securities violations. As part of the settlement, the scheme will collectively pay nearly $700,000 in penalties. The scheme operators have also agreed to destroy all MNGO tokens, remove MNGO from trading platforms, and cease any attempts to promote or offer MNGO for trading.
Key Points:
- SEC charged Mango DAO, Mango Labs, and Blockworks Foundation for securities violations related to MNGO tokens.
- As part of the settlement, MNGO tokens will be destroyed and removed from trading platforms, and the entities will pay nearly $700,000 in penalties.
- The case underscores that decentralized projects are not exempt from regulatory compliance.
Short Narrative:
The SEC has settled charges against Mango DAO, Mango Labs, and Blockworks Foundation, all entities behind the DeFi platform Mango Markets. The charges stem from the offering and sale of MNGO tokens, which were deemed securities. In a community vote held by Mango DAO token holders in August, the settlement was approved. As part of the deal, the firms will destroy all MNGO tokens, remove them from trading platforms, and collectively pay $700,000 in penalties.
This comes after Mango Markets was previously exploited for $110 million in 2022. The attacker, Avraham Eisenberg, manipulated the platform to inflate collateral and escape with stolen funds. In April 2024, Eisenberg was convicted of fraud, and Mango Markets settled with the CFTC for $500,000, bringing more scrutiny to the decentralized platform.
Actionable Insight:
This case demonstrates that decentralized finance (DeFi) projects are firmly on the regulatory radar. Token issuers must ensure they comply with securities laws, even if operating under a DAO structure. Compliance frameworks for decentralized projects must be strengthened to avoid costly legal repercussions.
Mango Markets’ downfall highlights an important compliance lesson for the crypto space: DAOs and decentralized platforms aren’t beyond the reach of regulatory authorities. The destruction of MNGO tokens is a stark reminder that digital assets must meet securities regulations or face severe consequences. As the SEC and CFTC continue to take action, DAOs and DeFi platforms must tread carefully and proactively establish compliance protocols to avoid becoming the next target.
Call for Information:
Do you have insight into DeFi projects skirting securities regulations? FinTelegram is actively investigating these cases. Your tips could help expose illegal activities in the crypto space and protect investors from future fraud.
