Solana’s Mango Markets proposes SEC settlement after $110M exploit

Mango Markets, a decentralised exchange on the Solana (CRYPTO:SOL) network, is facing a proposed settlement with the SEC following a significant exploit in October 2022.

The governing body, Mango DAO, has put forward a settlement proposal in response to allegations of securities law violations.

The proposal includes a $223,228 fine and the termination of the MNGO (CRYPTO:MNGO) token, which could profoundly affect the DAO's future.

The October 2022 exploit involved Avraham Eisenberg, who manipulated the price of MNGO tokens and futures contracts, extracting $110 million in cryptocurrencies through fraudulent means.

Eisenberg’s scheme inflated the token price by 1,300% in just 20 minutes using a feature that allowed him to “borrow” against his holdings.

This exploit led to investigations by US regulators, including the SEC, DOJ, and CFTC.

In April, Eisenberg was convicted of commodities fraud, manipulation, and wire fraud related to the exploit.

The SEC has accused Mango DAO of violating Sections 5(a) and 5(c) of the Securities Act of 1933 and additional breaches by Mango Labs and the Blockworks Foundation under Section 15(a) of the Securities Exchange Act of 1934.

To resolve these allegations, Mango DAO's settlement proposal includes paying a civil penalty and permanently halting the MNGO token's offerings and sales in the US.

The proposal also requires the DAO to destroy or make unavailable any MNGO tokens it controls within ten days of the final judgment.

Furthermore, the DAO must remove MNGO tokens from all cryptocurrency exchanges and avoid soliciting listings.

This settlement could jeopardize Mango Markets' future operations, as the MNGO token is vital for the protocol's governance.

The proposal emphasizes transparency and confidentiality due to ongoing investigations.

Currently, Mango DAO holds approximately $2 million in USDC and other assets.

This case could set a precedent for DeFi regulation, highlighting the increasing scrutiny faced by crypto projects.

At the moment, the Mango price is $0.01635.