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.
