As a seasoned crypto investor with over a decade of experience in this rapidly evolving digital frontier, I can’t help but feel a sense of deja vu when reading about yet another regulatory settlement involving an unregistered security and unregistered broker services. The Mango DAO saga is a stark reminder of the challenges that lie ahead for decentralized autonomous organizations (DAOs) and their tokens, especially when it comes to navigating complex regulatory landscapes.
In simpler terms, the U.S. Securities and Exchange Commission (SEC) has reached an agreement with Mango DAO, Mango Labs LLC, and Blockworks Foundation over accusations. The accusations include the MNGO token not being registered as a security and these entities providing unregistered broker services.
The involved parties will burn their MNGO tokens and halt trading on cryptocurrency platforms, also agreeing to pay a total of $700,000 as part of the agreement, which is yet to be approved by the court. This settlement was announced Friday in a press release, following an open vote by Mango DAO about this offer less than a month ago. Earlier this week, Mango DAO also agreed on a settlement proposal with the Commodity Futures Trading Commission (CFTC), which passed unanimously.
Members of the Mango Decentralized Autonomous Organization (DAO) make decisions on proposals using the MNGO governance token. The outcome of the project is uncertain if this token is no longer part of it. In a statement, the Securities and Exchange Commission (SEC) highlighted that both Mango DAO and Blockworks Foundation (two separate entities, not linked to the news and events industry) raised approximately $70 million by selling MNGO tokens from August 2021 onward.
In the terms of the agreement, neither Mango DAO, Blockworks Foundation, nor Mango Labs acknowledge or dispute the allegations that have been made against them.
According to the SEC’s Acting Head of the Crypto and Cyber Unit, Jorge Tenreiro, any organization providing “functions similar to a securities intermediary” must either register with the SEC or qualify for an exemption from such registration.
From the start of our crypto regulatory initiative, we’ve maintained that the term ‘DAO’ (Decentralized Autonomous Organization) doesn’t alter the underlying entities behind a project, their actions, or whether they require registration. Similarly, using software like automated or open source tools to facilitate securities transactions doesn’t change the essence of those activities,” he stated in his declaration.
In an attempt to reopen, Mango Markets – a platform that’s been battling recovery since over $110 million in tokens were stolen last year by Avraham Eisenberg – made an effort to relaunch its decentralized trading platform this year. Although Eisenberg was found guilty of fraud and market manipulation related to his activities with Mango, his sentencing has been postponed until December 2024.
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2024-09-27 22:46