Former Top DEX Falls! Mango DAO Proposes Settlement with SEC: Destroy All Tokens and Delist
The DeFi protocol Mango Market, which collapsed due to market manipulation, is facing multiple securities violation charges from the U.S. Securities and Exchange Commission (SEC). The Mango DAO behind it has proposed to settle by paying fines, burning all tokens, and delisting from all exchanges, without admitting or denying the allegations.
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Mango DAO Settlement Proposal: Pay Fines, Destroy MNGO Tokens
On August 19th, Mango DAO released this proposal for a vote, indicating consideration for a settlement with the SEC:
Represented by CyberByte sp. z.o.o, Mango DAO is responsible for handling regulatory matters in the US. Based on the terms outlined below, we have submitted a binding settlement request to the SEC, which includes payment of civil fines, injunctive relief, and a commitment to delist.
It is noted that CyberByte sp. z.o.o is directly owned by Adrian Brzeziński, one of the main developers of Mango DAO, as confirmed here.
Prior to this, the US Department of Justice (DOJ), SEC, and the Commodity Futures Trading Commission (CFTC) have accused the DAO of violating various securities laws.
The settlement proposal outlines the following actions Mango DAO will take:
- Pay a fine of $223,000 for each entity accused
- Cease the issuance and sale of all tokens, and delist from all trading platforms
- Destroy all MNGO tokens
As part of the settlement, the DAO will neither admit nor deny the SEC's allegations.
Currently, the vote has garnered an overwhelming majority of nearly 300 million in favor, with 13 hours remaining until the voting deadline.
Furthermore, as specific details have not been disclosed, it remains unclear whether these conditions were suggested by regulatory agencies or initiated by the DAO.
Mango Markets Exploitation Incident
Reviewing data from DeFiLlama, Mango Markets, once a leading DEX on Solana, had a peak Total Value Locked (TVL) exceeding $200 million.
However, in October 2022, trader Avraham Eisenberg exploited oracle price manipulation, resulting in losses exceeding $116 million, leading to insolvency of the platform.
In April of this year, Eisenberg was ultimately convicted of wire fraud, commodities fraud, and manipulation charges, facing up to 20 years in prison, with the case still under appeal.
Mango Markets Manipulator Convicted! Prosecutor: Conditions for Google Fraud Met
In response, Mango DAO stated in the proposal that following this incident, multiple US regulatory bodies initiated investigations into Mango Markets:
Due to the nature of the investigations being confidential, the information that DAO representatives can disclose is limited.
SEC's Decision Pending
DLNews pointed out that not only Mango DAO but also developer Mango Labs and protocol maintainer Blockworks Foundation are accused of securities violations in this case, with all three entities collectively paying around $669,000.
Currently, Mango DAO's treasury reserves still hold approximately $44 million worth of MNGO tokens and around $5.24 million in USDC.
It is evident that the purpose of the proposal is to avoid lengthy and costly litigation with the SEC by paying fines, though the SEC has yet to respond.