Mango Markets, a leading decentralized crypto exchange on the Solana blockchain, is seeking community votes on the settlement proposal with the US Securities and Exchange Commission (SEC) for allegations of securities law violations.
A Unique Approach to Settlement
Yesterday (Monday), the governance body that manages Mango Markets opened voting for the “SEC settlement offer proposal.” The settlement offer by the DAO representatives includes the payment of $223,228 in civil penalties, which will be paid to the SEC from the DAO treasury.
Mango Markets’ DAO treasury currently holds about $2 million in USDC stablecoin and other assets.
“The DAO Representative will be authorized to transfer USDC from the DAO Treasury and convert it to USD in the amount of the penalty to be held in escrow while the SEC Commissioners evaluate final approval of the DAO’s settlement offer,” the announcement by Mango Markets’ governance body noted.
However, the SEC has yet to make any formal decision on the settlement. If the Mango Markets community approves the proposal, it could open a new channel for how decentralized platforms might settle with regulators in the future.
The settlement would also require the destruction of MNGO token holdings and their delisting from all cryptocurrency exchanges. As MNGO is the network's primary governance token, this raises concerns about the decentralized exchange's future operations.
#Mango Markets #DAO is considering a settlement with the #SEC over allegations of securities law violations, proposing to pay a $223,228 fine, destroy its #MNGO tokens, and seek delisting from exchanges. The proposal has already reached a #quorum with unanimous support. This… pic.twitter.com/a0Ohmwhz8l
— TOBTC (@_TOBTC) August 20, 2024
A Popular Decentralised Platform
Mango Markets made headlines in 2021 for raising $70 million by selling its MNGO tokens. However, public sales were conducted in markets outside the United States. The platform again grabbed the limelight when now-convicted fraudster Avraham Eisenberg exploited it, draining about $110 million worth of digital assets.
The SEC also began investigating Mango Markets a few days before the trial of Eisenberg. Furthermore, the Department of Justice and the Commodity Futures Trading Commission are also investigating the platform.
“Due to the rules regarding the confidentiality of settlement discussions and because the SEC’s investigation is ongoing and non-public as a matter of law, the DAO Representative is limited in the information that it is permitted to share in a non-privileged context,” the announcement added.
This article was written by Arnab Shome at www.financemagnates.com.
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