From cointelegraph by Mehab Qureshi

Solana-based decentralized exchange Mango Markets is winding down its operations. 

On Jan. 11, Mango Markets announced through its X account that it is “shutting down” and it is time for users to “close their positions.”

Source: Mango Markets

This follows governance proposals to adjust interest rates and collateral requirements, effectively ending borrowing and lending on the platform. These proposals, supported unanimously, are set to take effect on Jan. 13.

The closure comes after a settlement with the US Securities and Exchange Commission (SEC).

Related: Eisenberg seeks to have Mango Markets fraud convictions thrown out

SEC settlement 

On Sept. 27, 2024, the SEC filed settled charges against Mango DAO and the Blockworks Foundation, alleging the sale of unregistered securities. 

According to the SEC, Mango raised over $70 million in August 2021 by selling MNGO governance tokens, which violated the Securities Act of 1933. The SEC also accused Mango Labs of acting as an unregistered broker, violating the Securities Exchange Act of 1934.

As part of the settlement, Mango’s decentralized autonomous organization (DAO) agreed to pay $700,000 in civil penalties, destroy MNGO tokens, and petition exchanges to delist the tokens. 

“Since the inception of our crypto enforcement program, our view has been that the label ‘DAO’ does not change the reality of who is behind a project,” said Jorge Tenreiro, chief of the SEC’s Crypto Assets and Cyber Unit.

The Mango DAO voted on Aug. 19, 2024, to settle with the SEC for $223,228 and destroy MNGO tokens. A separate proposal to settle with the CFTC for $500,000 followed in September 2024.

Mango Markets was launched in August 2021 by founders Maximilian Schneider, Britt Cyr and John Kramer. The platform was built on the Solana blockchain as a decentralized exchange and lending platform. It aimed to provide fast, low-cost trading and borrowing services using its governance token, MNGO.

At the time of publishing, Mango Markets had a total value locked of $9 million, reflecting a 95.7% decline from its all-time high of $210 million in November 2021, according to DefiLlama.

A history of legal and financial troubles

The roots of Mango Markets’ shutdown are traced back to an exploit in October 2022, where crypto trader Avraham “Avi” Eisenberg drained over $100 million from the platform. Eisenberg exploited a vulnerability in Mango’s protocol, leading to significant financial losses. 

While he returned $67 million as part of a community governance vote, he retained $40 million. US authorities arrested Eisenberg in December 2022, charging him with fraud and market manipulation.

Eisenberg has remained in custody since his arrest, and his sentencing has been postponed multiple times. Initially scheduled for Dec. 12, 2024, it was later delayed to Feb. 11, 2025, and now April 10, 2025. His legal team cited “the complexity of some of the sentencing issues” as a reason for the delay. 

Eisenberg faces a maximum sentence of 20 years in prison and potential civil enforcement actions from the SEC and US Commodity Futures Trading Commission.