Mango Markets Settles SEC Charges

Solana money market Mango has settled with the SEC in yet another gut punch for the previously exploited protocol and the broader crypto industry.

What’s the Scoop?

• Settlement Terms: Mango DAO and its parent corporations (Mango Labs and Blockworks Foundation) have settled with the SEC for their unregistered sale of MNGO tokens and unregistered brokerage activity. The three entities behind the project need to pay collective fines of $700k, destroy their MNGO tokens, and stop violating federal securities laws. 
• Startling Interpretations: Speaking for the SEC, Acting Chief of the Crypto Assets and Cyber Unit Jorge G. Tenreiro states that “the label ‘DAO’ does not change the reality of who is behind a project.” Additionally, the SEC contends that active solicitation and recruitment of new users by the centralized Blockworks Foundation and Mango Labs constitutes unregistered brokerage activity.

Bankless Take:

Crypto supporters have long stood behind the notion that decentralization and the novel nature of blockchain technology can enable projects to issue tokens, but the regulators see differently.

Just yesterday, Roman Storm’s motion to dismiss the Tornado Cash case was denied by U.S. Federal Court on grounds that the “Tornado Cash” enterprise extended well beyond the base smart contracts, that entities conducting the same functions as money transmitters must comply with pertinent regulations even if they are not registered such, and that first amendment protections do not apply to the functional outcomes of code.