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In a significant development within the cryptocurrency sector, the U.S. Securities and Exchange Commission (SEC) has initiated legal proceedings against Mango DAO and Blockworks Foundation. This action underscores the regulatory body’s ongoing efforts to enforce compliance in the digital asset realm. The current focus is on the MNGO Token, which has attracted attention following a notable hacking incident. SEC Chairman Gary Gensler has reiterated that regulatory measures will persist against entities that fail to adhere to established guidelines. What Are the Lawsuit’s Specifics? The SEC’s lawsuit targets Mango Labs LLC and Blockworks Foundation over allegations of securities violations linked to the sale of various cryptocurrencies through the Mango Markets platform. The commission claims these sales, conducted since August 2021, amassed $70 million, and argues that the entities unlawfully offered these digital assets as securities. This lawsuit is part of a broader regulatory crackdown, similar to actions taken against other platforms like Coinbase and Binance. How Are Decentralized Structures Involved? Despite the decentralized label, the SEC views the DAO’s structure as misleading, labeling it “pseudo.” Jorge G. Tenreiro, head of the SEC’s Crypto Assets and Cyber Unit, stressed that the project’s nature doesn’t change with its decentralized branding, implying the need for regulatory oversight. The SEC argues that the sale of tokens to numerous investors breaches securities laws. The legal action, filed in the Southern District of New York, resulted in Mango DAO and associated organizations agreeing to a $700,000 penalty. Additionally, they consented to the delisting of MNGO Tokens from their platform, highlighting the potential pitfalls of operating under a decentralized framework without proper registration. Key conclusions arising from this case include: The SEC is intensifying its scrutiny of cryptocurrency platforms. Decentralized structures are not immune to regulatory requirements. Significant financial penalties can result from non-compliance. With this lawsuit, the…

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Filed under: News - @ September 28, 2024 12:23 am