Mango Markets is considering making a settlement offer with the United States Securities and Exchange Commission (SEC) over allegations it violated US securities laws. 

The DAO that manages the Solana-based decentralized exchange (DEX) opened voting for an “SEC Settlement Offer Proposal” on Aug. 19.

The Mango DAO proposed a settlement that includes paying fines, destroying its MNGO tokens, and seeking delisting from trading platforms. 

At the time of writing, with more than two days of voting time remaining, it had already reached a quorum with 106,717,813 votes, all opting for ‘yes.’

The Solana-based DEX has been struggling since October 2022, when trader Avraham Eisenberg manipulated the protocol, draining $110 million. This led to his criminal trial for fraud and manipulation in April, when he was found guilty. 

Following the heist, the SEC, Department of Justice, and Commodity and Futures Trading Commission began investigating the platform. The SEC claims that Mango DAO, Mango Labs, and Blockworks Foundation violated various securities regulations.

The proposed settlement involves Mango DAO neither admitting nor denying wrongdoing and paying a $223,228 civic penalty from the DAO Treasury, which currently holds nearly $2 million in USD Coin (USDC) and other assets. 

“As part of the settlement offer, the DAO would not be admitting or denying the SEC’s allegations.”

Additionally, Mango DAO would cease all offers, sales, and resales of MNGO tokens in the United States, destroy any tokens in its possession, and request their delisting from all exchanges.

The proposal aims to avoid litigation and resolve the SEC’s allegations without admitting or denying wrongdoing. However, it has yet to be accepted by the securities regulator. 

In early August, Eisenberg filed a motion for judgment of acquittal, insisting that his actions on Mango Markets were legal trading and not fraud or market manipulation.

Mango Market's $70 million token sale in 2021 was not available to US investors in an effort to avoid regulatory wrath, according to reports at the time.  

MNGO token prices gained 5.3% on the day, reaching $0.015 at the time of writing. However, they remain 97% down from their September 2021 all-time high of nearly $0.50. 

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