The DAO behind the Solana-based DeFi protocol, Mango Market, has overwhelmingly approved a proposal to settle a securities violation case with the US Securities and Exchange Commission (SEC).
On Aug. 19, MangoDAO submitted the SEC Settlement Offer Proposal to avoid further litigation after the financial regulator accused the platform of securities violations.
Under the proposal, MangoDAO would pay the SEC $223,228 in fines, destroy its MNGO token holdings, and seek delisting from trading platforms. It added:
“The settlement offer would also agree that the DAO will, and certify compliance, immediately cease all of its offers, sales or resales of MNGO tokens on the protocol through the means or instrumentalities of interstate commerce in the United States.”
Crypto lawyer Gabriel Shapiro noted that the SEC typically requires “token issuers” to destroy all “unissued” tokens to dissolve the “common enterprise” and end the “investment contract.” However, he questioned whether delisting the tokens from centralized exchanges truly serves investors’ interests.
Meanwhile, the MangoDAO proposal emphasized that the settlement is neither an admission nor a denial of wrongdoing.
As of this writing, the proposal has reached a quorum with over 110 million votes, all in favor of the settlement.
Mango Market’s downturn
Mango Markets was once a leading DeFi platform on Solana until Avraham Eisenberg exploited it for $110 million in 2022. At that time, Eisenberg admitted to the actions but claimed they were legitimate.
Eisenberg was recently convicted after being found guilty of commodities fraud, commodities manipulation, and wire fraud. He is reportedly seeking a retrial of his case.
Although Eisenberg returned a significant portion of the funds to MangoDAO, the platform has struggled since, with deposits remaining a fraction of their pre-exploit levels. Meanwhile, the incident also drew the attention of regulators, leading to further inquiries into Mango Markets by regulators like the US SEC.
The MNG token is up 4% in the past 24 hours according to CryptoSlate data.
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