Mango DAO Proposes Agreement with SEC Following Major Attack

Mango Markets, once a leading decentralized platform on Solana, faced a significant shift after a $110 million attack last year. Following this event, the platform’s governing body, Mango DAO, decided to propose an agreement with the SEC. This proposal includes halting the trading of MNGO tokens and paying a $223,228 fine.

Legal Investigations After the Eisenberg Case

The agreement proposal came after several regulatory bodies in the US began examining the protocol. Mango DAO requested a vote on this proposal. The result of this vote could make the platform’s future uncertain, especially as ending the trading of MNGO tokens poses a serious threat to Mango Markets’ operations.

Mango Markets took a significant hit after a $110 million attack orchestrated by Avraham Eisenberg. Following the attack, Eisenberg faced charges of fraud and market manipulation. Institutions like the US Department of Justice (DOJ), SEC, and Commodity Futures Trading Commission (CFTC) began investigating Eisenberg’s role in the incident. Simultaneously, some regulatory bodies also started examining Mango Markets.

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The SEC claims that Mango DAO violated sections 5(a) and 5(c) of the Securities Act of 1933. Additionally, Mango Labs and Blockworks Foundation are accused of violating section 15(a) of the Securities Exchange Act of 1934.

Details of the Agreement Proposal

The proposal from Mango DAO emphasizes that the DAO should cease violating sections 5(a) and 5(c) of the Securities Act of 1933. Furthermore, within 10 days of the agreement’s finalization, the DAO must withdraw all MNGO tokens from trading and completely halt their trade. The DAO is expected to maintain transparency during this process, although shared information may be restricted due to confidentiality rules.

Acceptance of this proposal could significantly impact Mango Markets‘ operations. The removal of MNGO tokens, used in the platform’s decision-making processes, creates substantial uncertainty for Mango Markets’ future. This situation could also set a new precedent for the relationship between DeFi protocols and securities regulators.

The increasing regulatory pressures in the crypto world show that even projects like Mango Markets, which try to avoid US investors, cannot escape these pressures. If this proposal is accepted, similar regulatory paths may be followed for other protocols operating in the DeFi world.