The United States Securities and Exchange Commission (SEC) announced Friday that he charged the teams behind the SolanaDeFi platform based on Mango Markets – Mango DAO, Mango Labs and Blockworks Foundation – with headline accusations following a lengthy investigation.
The fees have already been paid and the settlement was approved by MNGO token holders via Mango DAO in August. Collectively, the companies will pay nearly $700,000 in civil penalties and have agreed to “destroy their MNGO tokens, request the removal of MNGO tokens from trading platforms, and refrain from soliciting a trading platform to authorize trading , the offer or sale of MNGO”. “.
Mango DAO and the Blockworks Foundation, the entity behind the token, have been accused of offering and selling MNGO tokens, while the original platform developer, Mango Labs, and the Foundation have been accused of acting as an unregistered broker.
Mango Markets users holding the MNGO token voted in August to approve a settlement with the Wall Street regulator for the crypto project, which was the subject of a high-profile exploit as well as several regulatory investigations.
Mango Markets is a protocol that allows users to trade tokens without intermediaries. In 2022, an attacker target the decentralized finance app, fetching $110 million in assets.
The theft occurred when the hacker temporarily increased the value of Mango Markets’ collateral due to a flaw in its system. The hacker then took out loans from Mango’s treasury and disappeared with the funds.
The federal government charged Avraham Eisenberg with orchestrating the hack and recovering the funds; he was convicted of fraud in April.
His case made headlines because his lawyer had argued that risky DeFi exploits like the one that hit Mango Markets were not subject to current US criminal law.
This is the first case in the crypto world related to the manipulation of digital assets. The world of decentralized finance– DeFi for short – is a highly experimental and risky industry in the crypto world. Hacks like the one that hit Mango Markets aren’t out of the ordinary.
Last year, the Commodity Futures Trading Commission also filed a complaint against Avraham Eisenberg, and against the protocol and its founders. Mango Markets users this week I voted to pass a proposal not to admit or deny any wrongdoing in a settlement with the CFTC, but to pay a $500,000 fine to the regulator.
Jorge G. Tenreiro, acting head of the SEC’s Crypto Assets and Cybersecurity Unit, said Friday: “Since the beginning of our crypto enforcement program, our view has been that the label “DAO” does not change the reality of who is behind it. a project, the activities in which they participate or whether their activities must be recorded.
“If you operate as a securities intermediary,” it continued in the statement, “you must register or be exempt, regardless of the technology used and the type of legal entity used.”
Editor’s note: This story is breaking and will be updated with additional information.
Daily debriefing Newsletter
Start each day with the biggest news stories of the day, plus original features, a podcast, videos and more.
