The U.S. Securities and Exchange Commission (SEC) recently reached a settlement with Mango Markets, a decentralized exchange (DEX) based on the Solana blockchain. The SEC accused Mango Markets of violating regulatory provisions related to registration and investor protection.
According to the SEC, Mango DAO, the decentralized autonomous organization behind Mango Markets, raised over $70 million through unregistered offers and sales of MNGO tokens. Additionally, the SEC alleged that affiliated entities Blockworks Foundation and Mango Labs LLC were involved in unregistered broker activities.
As part of the settlement agreement, Mango DAO, Blockworks Foundation, and Mango Labs agreed to pay a civil penalty of nearly $700,000. While they did not admit or deny the allegations, they agreed to destroy all MNGO tokens and request their removal from trading platforms.
Mango DAO approved a settlement proposal from the SEC in August and has also proposed a $500,000 settlement with the U.S. Commodity Futures Trading Commission (CFTC). This proposed settlement would require Mango DAO to cease and desist from violating commodity regulations, pending approval from the CFTC.
The investigations by both the CFTC and SEC into Mango Markets were prompted by a significant exploit of the protocol by crypto trader Avraham Eisenberg, resulting in the loss of $110 million worth of digital assets in 2022.
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Image credit: Midjourney
In conclusion, the settlement between Mango Markets and the SEC highlights the importance of compliance with regulatory requirements in the cryptocurrency industry. It serves as a reminder for decentralized platforms to prioritize investor protection and adhere to legal guidelines to maintain a secure and transparent ecosystem.