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The U.S. Securities and Exchange Commission is slamming Mango Labs’ attempt to unravel its $700,000 settlement, warning that shifting crypto policies under a new administration don’t give the company a free pass to escape a deal it willingly signed.

In a filing Thursday in New York federal court, the SEC urged the judge to leave the agreement intact, arguing Mango Labs failed to show any extraordinary circumstances under Rule 60, which allows relief from a final judgment.

“The court should hold Mango Labs to the bargain it struck, knowing full well future commissions could pivot on crypto policy,” the SEC said.

The Deal in Question

Mango Labs and its affiliate, Blockworks Foundation, cut the deal in October 2024, without admitting or denying allegations that they ran a $70 million unregistered securities offering through their MNGO token. The settlement required the firms to destroy MNGO tokens, seek delistings from other exchanges, and pay $700,000 in penalties.

The scrutiny stemmed from an October 2022 exploit in which trader Avraham Eisenberg drained over $100 million from Mango Markets, the decentralized exchange tied to the project. Eisenberg was convicted in April 2024 of fraud but later saw several charges vacated, including commodities fraud and manipulation. The government is appealing.

Mango Labs Cries Foul

In its June motion, Mango Labs argued the judgment unfairly restrains its ability to operate in the token market and imposes “one-sided restraints on speech.” The company claimed the timing of its settlement—just weeks before Donald Trump’s election and Paul Atkins’ appointment as SEC chair—left it bound by rules the agency has since abandoned.

“The same platform launched today under identical circumstances would not face SEC enforcement,” Mango Labs said, insisting it was unfairly punished for being “last in the door” before policy shifted.

SEC: A Deal Is a Deal

The SEC fired back that Mango Labs already reaped the benefit of avoiding litigation and the risks of losing at trial, which could have resulted in heavier penalties and stricter restrictions.

“Having gained the advantage of settlement, Mango Labs cannot now shed its obligations simply because the winds of policy have shifted,” the SEC wrote. Rule 60, the agency stressed, doesn’t cover “buyer’s remorse.”

Ripple Comparison Falls Flat

Mango Labs pointed to the SEC’s own move to modify penalties in the Ripple Labs case, but the commission argued the situations were worlds apart. Ripple’s adjustments were negotiated jointly while appeals were still pending, the SEC said, unlike Mango’s finalized and closed judgment.

Even then, the Ripple court denied relief, and the SEC noted it would be inconsistent to grant it here.

The Bigger Picture

The dispute underscores the tension between regulatory certainty and shifting enforcement priorities in Washington. With the SEC under new leadership promising a friendlier approach to crypto, companies like Mango Labs are testing whether past deals can be undone.

For now, the SEC is holding firm: a deal signed in the storm still binds when the skies clear.