Solana-based decentralized exchange Mango Markets, is shutting down operations. This comes after an SEC settlement with legal troubles springing from a 2022 exploit. On January 11, the Solana-based DEX announced on its X account that it is shutting down operations. This resulted in users to close all open trading positions. Most borrowing on Mango will be “economically unviable” and collateral requirements would rise 10x for new positions.
This comes after governance regulations to adjust interest rates and collateral requirements leading to the abrupt end of all borrowing and lending on the platform. Furthermore, the governance proposals are kicking off from January 13, according to the announcement.
Mango Markets and SEC Settlement
The saga began when the US Securities and Exchange Commission (SEC) settled charges against Mango DAO and the Blockworks Foundation. There were accusations of selling unregistered securities. Mango raised over $70 million in August 2022 after selling $MNGO token governance tokens. This was a move that violated the Securities Act of 1933. Moreover, the SEC also accused Mango Labs of operating as a broker without a registration license, violating the Securities Act of 1934.
As outlined in the settlement, Mango’s decentralized autonomous organization (DAO) agreed to pay up to $700,000 in civil penalties. Additionally, they destroyed all MNGO tokens and asked all exchanges to delist the tokens. According to Jorge Tenreiro, chief of the SEC’s Crypto Assets and Cyber Unit, calling an organization a DAO does not exempt it from legal responsibility or regulatory practices.
“Since the inception of our crypto enforcement program, our view has been that the label ‘DAO’ does not change the reality of who is behind a project,” Jorge said in a statement.
On August 19, 2024, the Mango DAO resolved to settle with the SEC for $223,228 and destroy all MNGO tokens. A separate proposal was filed around September 2024, with Mango settling the CFTC up to $500,000. Launched in August 2021 by founders Maximilian Schneider, John Kramer, and Brit Cyr, Mango Markets was built on the Solana blockchain as a decentralized exchange and lending platform. According to DefiLlama, Mango Markets boasts over $9 million in total value locked. This reflects a 95.7% decline from it’s all-time high of $210 million in November 2021.
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