According to TechFlow, on October 10, DL News reported that Mango Labs was involved in a new legal dispute just weeks after reaching a settlement with the U.S. Securities and Exchange Commission (SEC). On October 7, Mango Labs filed a lawsuit in Puerto Rico, accusing two senior contributors to Mango DAO, John Kramer and Max Schneider, of misappropriating more than $10 million of DAO funds to the detriment of other members. The lawsuit alleges that the defendants secretly purchased MNGO tokens from FTX, manipulated the MNGO market to artificially raise the price of tokens, and sold tokens to Mango DAO in violation of their fiduciary duties. Both Kramer and Schneider deny any wrongdoing.

The lawsuit states that Kramer and Schneider took advantage of the fact that many Mango DAO members were unable to communicate as witnesses during the Eisenberg trial to implement their plan. Specifically, they secretly purchased 333 million MNGO tokens from the FTX liquidation process at below-market prices, and then sold these tokens to the DAO at a higher price through the DAO proposal, thereby draining the DAO's funding pool. When other Mango DAO members became suspicious, Kramer and Schneider refused to admit that they had purchased these MNGO tokens, instead claiming that they were a "strategic and activist investor."