Mango DAO and Blockworks Foundation raised more than $70 million selling MNGO governance tokens without registering the offering. Blockworks Foundation and Mango Labs LLC separately settled charges of operating as an unregistered broker, for soliciting users, advising on investment decisions, and handling customer funds on the Mango Markets platform. All parties settled without admitting or denying the SEC’s findings, and agreed to pay close to $700,000 in combined penalties, destroy the MNGO tokens, and stop soliciting exchanges to list them.
What the SEC’s position actually establishes
The SEC’s own language in the matter is unusually direct: the label “DAO” does not change who is behind a project, what they are doing, or whether their activity needs to be registered, and using automated or open-source software to perform those functions doesn’t change that either. Three organisational forms, a purportedly decentralised entity, a Panamanian foundation, and a software company, were treated as one underlying operation for the purpose of the analysis.
That matters because decentralised structure has become a common answer to accountability questions in Web3, sometimes accurately, often as a description that doesn’t match how a project actually operates. A DAO on paper can sit above a small, identifiable group making the real decisions, funded through a foundation, built by a company that never stopped being centralised in practice.
Distinguishing the two isn’t about reading a whitepaper more carefully. It’s about tracing actual control: who decided what got built, who controlled the treasury, and who benefited when the token had value. That’s a factual question, not a structural one, and it’s the same question we ask at the assessment stage of any matter involving a claimed DAO or foundation structure.
This piece describes the SEC’s stated findings in a settled matter. It is not legal advice.