Mango Markets Seeks Settlement with SEC Over Violation of Securities Laws

Solana-based DEX Mango Markets is considering offering a settlement to the United States Securities and Exchange Commission (SEC) over alleged securities law violations.

Its governance body, Mango DAO, initiated a vote on August 19 to decide whether to propose a settlement to the SEC. The vote has garnered significant engagement, with most voters saying yes to the settlement proposal.

This move, in turn, reflects the community's desire to resolve ongoing regulatory challenges.

Mango Markets And The SEC Settlement

The proposed settlement by Mango DAO is comprehensive, addressing several concerns raised by the SEC. It includes a plan to destroy its MNGO tokens, pay fines, and seek the delisting of these tokens from trading platforms.

The DAO, which governs the platform, has already reached a minimal number of voters. The proposal has gained over 106 million votes in its favor, suggesting strong community support for the DAO's action.

Mango Market's woes started in October 2022 following an exploit by a trader named Avraham Eisenberg. Eisenberg had manipulated the protocol to siphon off $110 million, leading to a criminal trial that found him guilty. In April 2024, a court convicted Eisenberg of fraud and market manipulation.

This event not only shook the platform but also attracted regulatory security. Several regulatory bodies, including the Department of Justice, the SEC, and the Commodity and Futures Trading Commission, launched investigations against Mango Markets.

The SEC's investigation into Mango DAO, Mango Labs, and the Blockworks Foundation has been ongoing. The agency found the entities guilty of violating securities regulations.

To settle these allegations, Mango DAO proposed paying a $223,228 civil penalty from its treasury, which holds nearly $2 million in various assets, including USD Coin.

However, the proposal demands that Mango DAO would not admit or deny the SEC's allegations, a common feature in settlements of this nature.

Consequently, if the SEC accepts the proposal, Mango DAO will halt all sales, offers, and resales of its MNGO tokens in the United States. The DAO will also destroy any tokens it currently holds and request that exchanges delist them.

This decisive move aims to avoid protracted litigation and end the regulatory scrutiny that has plagued the platform.

Eisenberg Takes Part in the Case

Eisenberg's recent legal maneuvering further complicates the situation. In early August, he filed for judgment of acquittal, arguing that his activities on Mango Markets constituted legal trading rather than fraud or manipulation.

If the court entertains this claim, it could add another layer of complexity to the ongoing regulatory and legal battles facing Mango Markets.

Mango Markets has had a rocky journey with its MNGO tokens. Despite the recent 5.3% increase in the token's value, pushing it to $0.015, the price remains down by 97% from its all-time high of nearly $0.50 in September 2021.

The token's significant depreciation is a stark reminder of the platform's challenges, both in the market and the regulatory arena.

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