Solana’s Former Top Decentralized Crypto Exchange Faces Securities Breach

Mango Markets, once Solana’s most powerful decentralized exchange and later dealt a major blow by fraudster Avraham Eisenberg, is set to settle with the U.S. Securities and Exchange Commission over allegations it violated securities laws.

Mango DAO, the administrator of Mango Markets, announced yesterday that it has initiated a vote on an “SEC settlement proposal.” The proposal includes provisions that would require the company to pay hundreds of thousands of dollars in fines, destroy MNGO tokens, and delist the tokens from other trading platforms.

The SEC has not yet accepted the proposal, but if it passes (there are currently enough votes to pass) and the commission approves it, the future of Mango Markets could become quite uncertain.

It is not yet clear how Mango Markets would conduct its day-to-day operations if its MNGO governance token, which investors use to vote on everything from token listings and buybacks to debt repayments, ceases to function.

The settlement offer proposed yesterday does not include any Eisenberg-related items, as it only addresses the SEC’s investigation. Mango DAO is facing allegations that it sold an unregistered security, according to the lawsuit, and Mango Labs, the developer of Mango Markets, is facing allegations that it operated without a license.

The proposed settlement would not provide any clues as to whether Mango DAO would accept these allegations. The DAO, which offered to pay a fine of $223,228, currently has around $2 million worth of USDC and many other assets in its treasury.

Mango Markets stood out by selling $70 million worth of MNGO tokens during the bull run that Solana witnessed in the summer of 2021.