On Monday, the governing body of Mango DAO initiated a vote on a settlement proposal from the SEC. Under the proposed agreement, the company would be required to pay several hundred thousand dollars in fines, destroy its MNGO tokens, and seek delisting from other platforms.
At this stage, the SEC has not yet made a final decision on the settlement offer, leaving the future of Mango Markets uncertain.
Mango DAO is accused of selling unregistered securities and operating as an unlicensed broker. Additionally, the Blockworks Foundation is facing similar allegations from regulators.
It is important to note that the proposed settlement does not involve an admission of guilt by Mango DAO. The company would be required to pay a fine of $223,228. Currently, the exchange holds approximately $2 million in USDC and other assets in its treasury.
It is worth recalling that Mango Markets struggled to recover after an incident in October 2022 when trader Avraham Eisenberg exploited the protocol for $110 million using a complex strategy. Eisenberg has since faced criminal charges for fraud in the DeFi sector.
Shortly after this incident, it was revealed that Mango Markets was under regulatory investigation. On Monday, some details of this investigation came to light. In addition to the SEC, Mango Markets is also being investigated by the Department of Justice and the Commodity Futures Trading Commission.
It remains unclear whether Mango Markets will be able to continue its operations if the MNGO governance token becomes obsolete.