Mango Markets To Wind Down Operations After $110 Million Exploit and SEC Settlement

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  • Jan 12, 2025
Mango Markets To Wind Down Operations After $110 Million Exploit and SEC Settlement

Mango Markets, a decentralized exchange on the Solana blockchain, has announced it will cease operations due to legal challenges, governance decisions, and regulatory issues. The platform urged users to close their positions ahead of the scheduled wind-down. Launched in August 2021, the exchange was designed to provide efficient trading and borrowing services but faced several significant setbacks during its operation.

A major blow came in October 2022 when Avraham "Avi" Eisenberg exploited the platform, manipulating the price of Mango’s native token, MNGO, and extracting $110 million. Eisenberg referred to his actions as a “profitable trading strategy,” but he was later convicted of fraud in April 2023. He remains in custody, with sentencing delayed to April 2025.

Mango Markets' decline was further compounded by a settlement with the U.S. Securities and Exchange Commission (SEC) in September 2024. The SEC alleged that Mango DAO had sold unregistered securities and operated as an unregistered broker. Under the settlement, Mango DAO agreed to destroy MNGO tokens, delist them from exchanges, and pay $700,000 in civil penalties. An additional $500,000 was settled with the Commodity Futures Trading Commission (CFTC).

Governance decisions also contributed to the platform's closure. Mango’s decentralized autonomous organization (DAO) and development team approved proposals to make borrowing on the platform economically unviable by altering interest rates and collateral requirements. These changes will take effect on Jan. 13, 2025. The proposals received unanimous support from the DAO and exceeded the required vote threshold.

Internal disputes within the Mango DAO further complicated the platform’s trajectory. Legal battles among founders over locked MNGO tokens obtained from the FTX estate added to the turmoil. Co-founder Maximilian Schneider mentioned on Discord in early January 2025 that contributors wanted to discontinue work on the project, leading to discussions about shutting it down. This decision was later formalized.

Mango’s total value locked (TVL) has dropped sharply, from a peak of $210 million in November 2021 to just $9 million. Despite efforts to recover from the October 2022 exploit and subsequent regulatory scrutiny, the challenges proved too great for the platform to overcome. Mango’s official statement read, “Mango v4 & Boost are winding down,” signaling the end of the exchange.

The exchange’s announcement brings an official close to a project that once showed promise but ultimately succumbed to a combination of external exploits, internal disputes, and regulatory pressure. Mango Markets did not respond to requests for comment.