Mango Markets to Phase Out Operations Starting Tomorrow, Reaches Settlement with SEC

BlockBeats News, January 12, according to Cointelegraph, Solana-based DEX Mango Markets is gradually winding down its operations after reaching a settlement with the SEC, conducting a governance vote, and addressing legal issues arising from a 2022 exploit. Yesterday, Mango Markets announced through its X account, "Closing the platform, it's time for users to close their positions." This follows the governance proposal's requirement to "adjust interest rates and collateral," closing lending positions on the platform, effective on January 13.

On September 27, 2024, the SEC settled charges against Mango DAO and the Blockworks Foundation, accusing them of selling unregistered securities. According to the SEC, Mango raised over $70 million in August 2021 through the sale of the MNGO governance token, violating the 1933 Securities Act. The SEC also accused Mango Labs of acting as an unregistered broker, violating the 1934 Securities Exchange Act. As part of the settlement agreement, Mango DAO agreed to pay a $700,000 civil penalty, destroy MNGO tokens, and request exchanges to delist the token. According to DefiLlama data, Mango Markets' TVL is $9 million, a 95.7% decrease from its peak of $210 million in November 2021.

The closure of Mango Markets can be traced back to October 2022 when crypto trader Avraham "Avi" Eisenberg stole over $100 million from the platform. Eisenberg later returned $67 million, retaining $40 million. Eisenberg was arrested by US authorities in December 2022, charged with fraud and market manipulation. Eisenberg has been in detention since his arrest, with sentencing repeatedly postponed until April 10, 2025. He faces up to 20 years in prison and civil enforcement actions from the SEC and the CFTC.