Solana-based decentralized exchange, Mango Markets is shutting down operations. This comes after an SEC settlement with legal troubles from a 2022 exploit.
On January 11, the Solana-based DEX announced on its X account that it was shutting down operations. This resulted in users closing all open positions. Most borrowing on Mango will be “economically unviable,” and collateral requirements for new positions will rise 10x.
This comes after governance regulations to adjust interest rates and collateral requirements abruptly ended all borrowing and lending on the platform. According to the announcement, the governance proposals kick off on January 13.
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.
The sale violated the Securities Act of 1933. Moreover, the SEC 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. They also destroyed all MNGO tokens and asked all exchanges to delist them. 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 is a decentralized exchange and lending platform built on the Solana blockchain. According to DefiLlama, the platform boasts over $9 million in total value locked, a 95.7% decline from its all-time high of $210 million in November 2021.
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