Mango Markets closes shop following SEC settlement 2025
Following a 2022 exploit, governance votes, and an SEC settlement, Mango Markets, a DEX based in Solana, is closing its doors.
Mango Markets, a decentralized exchange situated in Solana, is closing its doors. Through its X account, Mango Markets declared on January 11 that company was “shutting down” and that consumers should “close their positions.”
This basically puts an end to borrowing and lending on the platform, following governance initiatives to modify interest rates and collateral requirements.
These unanimously approved recommendations will go into effect on January 13. Following a deal with the US Securities and Exchange Commission (SEC), the closure has taken place. Alleging the sale of unregistered securities, the SEC filed settlement charges against Mango DAO and the Blockworks Foundation on September 27, 2024.
Mango violated the Securities Act of 1933 by selling MNGO governance tokens in August 2021, raising approximately $70 million, according to the SEC.
Mango Labs was also charged by the SEC with violating the Securities Exchange Act of 1934 by operating as an unregistered broker.
Mango’s decentralized autonomous organization (DAO) consented to pay $700,000 in civil fines, destroy MNGO tokens, and ask exchanges to remove the tokens from circulation as part of the settlement. According to Jorge Tenreiro, head of the SEC’s Cryptocurrency Assets and Cyber Unit, “since the beginning of our cryptocurrency enforcement program, our view has been that the label ‘DAO’ does not change the reality of who is behind a project.”
The Mango DAO voted on Aug. 19, 2024, to settle with the SEC for $223,228 and destroy MNGO tokens. In September 2024, a different proposal to reach a $500,000 settlement with the CFTC was made. Mango Markets was launched in August 2021 by founders Maximilian Schneider, Britt Cyr and John Kramer.
The platform was created on the Solana blockchain as a decentralized trade and loan platform. It sought to deliver rapid, low-cost trading and borrowing services using its governance token, MNGO.
Mango Markets’ total value locked at the time of publication was $9 million, a 95.7% decrease from its peak of $210 million in November 2021, according to DefiLlama.
A history of legal and financial troubles
The reason behind the closure of Mango Markets can be found in an October 2022 exploit in which cryptocurrency trader Avraham “Avi” Eisenberg took advantage of a flaw in Mango’s protocol to drain over $100 million from the platform, resulting in substantial financial losses.
Eisenberg returned $67 million as part of a community governance vote, but kept $40 million. Eisenberg was arrested by US authorities in December 2022 on charges of fraud and market manipulation, and since then, his sentencing has been repeatedly delayed, first set for December 12, 2024, then Feb. 11, 2025, and finally, April 10, 2025.
The delay was attributed by his legal team to “the complexity of some of the sentencing issues.” The SEC and US Commodity Futures Trading Commission may take civil enforcement action against Eisenberg, who could get a maximum penalty of 20 years in prison.
