Solana-based decentralized exchange (DEX) Mango Markets may soon be required to pay an additional $500,000 in fines to settle allegations from the Commodity Futures Trading Commission (CFTC).
According to a proposal submitted by Mango Marketsâ legal team on September 22 to the Mango DAO, the decentralized exchange is under investigation by the CFTC for several regulatory violations. The proposed settlement aims to resolve the issue and avoid further legal action.
Violations
The investigation, which remains confidential and ongoing, accuses Mango Markets of failing to register as a commodities exchange, illegally offering services to U.S. customers, and neglecting to implement adequate Know Your Customer (KYC) measures.
Although full details of the case have not been disclosed due to its sensitive nature, the proposal indicates that settling the matter with the CFTC could prevent further litigation against the Mango DAO.
Mango Markets Responds
The legal representatives of Mango Markets emphasized in their proposal that the decentralized exchange would not admit to or deny any wrongdoing if the settlement is accepted by the CFTC. The settlement, however, seems to be heading toward approval. At the time of writing, the proposal has garnered overwhelming support from the DAO members, with 123,475,000 votes in favor and no opposition.
Ongoing Regulatory Challenges
This isnât the first time Mango Markets has faced regulatory scrutiny. In August 2023, the Mango DAO voted to pay $670,000 in a settlement with the U.S. Securities and Exchange Commission (SEC) over allegations that it violated securities laws by selling its native token, MNGO, as an unregistered security. That settlement ended an ongoing investigation that had also claimed violations occurred during Mangoâs 2021 token sale.
Mango Markets has faced a series of challenges since suffering a $110 million exploit in October 2022, when trader Avraham Eisenberg manipulated the protocol for personal profit. The fallout from that incident led to Eisenbergâs prosecution on charges of fraud and market manipulation, as well as intensified scrutiny of the company by U.S. regulatory agencies, including the SEC, Department of Justice (DOJ), and the CFTC.
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