Mango Markets DAO Proposes SEC Settlement

The DAO behind Mango Markets is set to pay a $223,228 penalty to the SEC as part of a settlement proposal designed to avoid further legal issues. The proposal includes halting all sales of MNGO tokens, destroying the DAO's remaining MNGO holdings, and requesting the removal of MNGO from all crypto exchanges and platforms where it is currently traded.

The governance proposal is expected to pass unanimously, with 100% (295,244,521) of votes currently in favor. Mango Markets, once a leading decentralized exchange (DEX) on Solana, reached a total value locked (TVL) of nearly $200 million at its peak, according to DeFiLlama.

However, the protocol faced a severe setback in October 2022 when Avraham Eisenberg manipulated the price of MNGO tokens. This allowed him to take out a $120 million loan, which led to a sharp decline in MNGO's price and left the protocol with significant bad debt. Eisenberg later offered to repay half of the loan if the DAO agreed not to pursue criminal charges against him, but that vote did not pass.

Following this incident, the DOJ, CFTC, and SEC launched investigations into Eisenberg's actions. Mango Labs LLC also sued him, while the protocol itself faced inquiries from several regulators, as mentioned in a January governance proposal. Eisenberg was arrested in December 2022 and charged with commodities fraud, manipulation, and wire fraud. In April, he was found guilty on all counts, despite his legal team's defense that he was simply executing a profitable trading strategy.

Eisenberg's legal team is currently seeking either an acquittal or a new trial, arguing that the original trial was improperly held in the Southern District of New York. The DAO's proposed settlement aims to resolve the ongoing issues by complying with the SEC's requirements, including paying the civil penalty and ceasing all MNGO-related activities. If approved, this would be a significant step toward closing a difficult chapter in Mango Markets' history.