Mango Markets DAO Proposes SEC Settlement for $223K Fine
Mango Markets DAO votes to settle with the SEC for $223,228, agreeing to cease MNGO token sales and destroy existing holdings to avoid litigation.
The decentralized autonomous organization (DAO) governing Mango Markets has proposed to pay a civil penalty of $223,228 as part of a settlement with the Securities and Exchange Commission (SEC) to avoid potential litigation.
Settlement Proposal Details
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The proposal includes:
- An agreement to cease all offers and sales of MNGO tokens.
- The destruction of all MNGO holdings.
- A request to delist MNGO from all crypto exchanges and trading platforms where it is currently traded.
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The governance vote is expected to pass unanimously, with 100% (295,244,521) of the votes in favor.
Background on Mango Markets
Mango Markets was one of the leading decentralized exchange (DEX) protocols on Solana, boasting a total value locked (TVL) of nearly $200 million at its peak, according to DeFiLlama.
Previous Exploitation Incident
In October 2022, Mango Markets was exploited by Avraham Eisenberg, who manipulated the price of MNGO to take out a $120 million loan. Following the price crash of MNGO, the protocol was left with significant bad debt.
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Eisenberg proposed to repay half of the loan in exchange for the DAO agreeing not to pursue criminal charges against him, but this proposal was rejected.
Investigations and Legal Proceedings
The Department of Justice (DOJ), Commodity Futures Trading Commission (CFTC), and SEC launched investigations into Eisenberg for his market manipulation activities. In addition, Mango Labs LLC filed a lawsuit against him, while the protocol faced inquiries from various regulators.
Eisenberg was arrested in December 2022 and charged with commodities fraud, commodities manipulation, and wire fraud. In April, a jury found him guilty on all counts, despite his defense team's argument that he was simply executing a profitable trading strategy.
Current Legal Status
Eisenberg's legal team is currently seeking either an acquittal or a new trial, arguing that the original trial venue in the Southern District of New York was inappropriate.
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