Key Takeaways:
- Mango Markets DAO has proposed a settlement with the SEC, including fines, destruction of tokens
- Mango Markets is under investigation by multiple U.S. agencies, including the SEC, DOJ, and CFTC, following the 2022 exploit
Mango Markets, a once-prominent decentralized exchange (DEX) on the Solana blockchain, is taking significant steps to resolve ongoing legal challenges with the United States Securities and Exchange Commission (SEC).
Following allegations of securities law violations linked to a 2022 exploit, the Mango Markets DAO has put forth a proposal for settlement with the SEC, marking a crucial moment in the platform’s efforts to navigate its legal troubles.
On August 19, 2024, the Mango Markets DAO, the decentralized organization governing the exchange, opened voting on a settlement proposal aimed at addressing the SEC’s allegations. The proposal includes several key actions:
- The DAO has agreed to pay fines as part of the settlement, although the exact amount has not been disclosed.
- The DAO plans to destroy its remaining MNGO tokens, the native cryptocurrency of the platform, to address concerns over its use and circulation.
- Mango Markets has proposed seeking delisting of the MNGO token from trading platforms, particularly within the United States, to comply with regulatory directives.
As of now, the proposal has already garnered substantial support from the Mango Markets community, with over 106 million votes in favor, surpassing the required quorum with more than two days of voting still left.
The current settlement proposal follows a broader investigation by U.S. regulators that has been ongoing since the infamous Mango exploit in 2022.
The SEC has charged Avraham “Avi” Eisenberg, the individual behind the exploit, with orchestrating an attack by manipulating the price of MNGO tokens. Eisenberg’s legal team has consistently argued that his actions were part of a “winning and legal trading strategy,” but he was nonetheless found guilty of commodities fraud, commodities manipulation, and wire fraud earlier this year.
In addition to the SEC’s charges, Mango Markets has also been under investigation by the Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC), though these probes are not addressed in the current settlement proposal.
The proposal represents Mango Markets’ attempt to avoid protracted litigation and further regulatory action, signaling a willingness to comply with U.S. securities laws. The DEX, once a top player in the decentralized finance (DeFi) space, has struggled to regain its footing following the exploit and subsequent legal challenges.
Interestingly, the price of MNGO has seen a slight uptick, increasing by 5.3% to $0.015 in the past day. However, this is a far cry from its all-time high of nearly $0.50 in September 2021, reflecting the platform’s ongoing challenges.
