The U.S. Securities and Exchange Commission (SEC) has intensified its crackdown on the cryptocurrency industry by filing settled charges against the decentralized application (dApp) Mango DAO and the Blockworks Foundation. The charges stem from the unregistered offer and sale of approximately $70 million worth of MGNO tokens, which the SEC categorizes as crypto asset securities.
Without admitting or denying the allegations, Mango DAO has agreed to pay a $700,000 settlement to the SEC and will destroy its remaining MNGO tokens. Additionally, the DAO plans to request exchanges to halt trading of the MNGO tokens. The SEC also charged Mango Labs LLC, the developer behind Mango DAO, for engaging in unregistered broker activities, which were also settled.
In a statement, the SEC asserted that the decentralized autonomous organization's (DAO) status does not exempt it from the requirement to register its tokens. "Our view has been that the label ‘DAO’ does not change whether their activities need to be registered," remarked the SEC's Acting Chief of the Crypto Assets and Cyber Unit.
Mango DAO is the latest entity to face the SEC’s scrutiny, which has been aggressively asserting its jurisdiction over the crypto industry since 2022. The SEC has aimed to address what it perceives as rampant non-compliance with securities regulations within the sector. In a recent CNBC interview, SEC Chair Gary Gensler emphasized that the agency’s numerous lawsuits against key players in the industry are meant to create a safer environment for investors. "This field will not long survive if you can’t build that investor trust in the markets," he stated.
Historically, Gensler has maintained that nearly all cryptocurrencies, except for Bitcoin, qualify as unregistered crypto asset securities. Earlier this year, the SEC made headlines by approving spot Ethereum ETFs, suggesting that the agency does not classify Ethereum as a security.
Crypto investors are increasingly hopeful that the next U.S. presidential term may usher in a more favorable regulatory environment for the industry. The Biden administration has largely supported the SEC's aggressive stance against cryptocurrencies. In contrast, Republican presidential nominee Donald Trump has emerged as a strong pro-crypto advocate for the 2024 election, publicly endorsing Bitcoin and promoting a decentralized finance (DeFi) project called World Liberty Financial, associated with his sons.
On the other hand, sitting Vice President and Democratic presidential nominee Kamala Harris has remained relatively quiet on crypto, only expressing a desire to foster innovation in the space.
As the regulatory landscape evolves, the actions against Mango DAO may serve as a cautionary tale for other crypto firms navigating the complex and often uncertain compliance requirements. With ongoing scrutiny from regulatory bodies, the future of crypto in the U.S. remains a focal point for industry stakeholders.
September 2024, Cryptoniteuae