MangoDAO’s proposed SEC settlement faces scrutiny over potential impact on investors

The DAO down the Solana-based DeFi protocol, Mango Market, has overwhelmingly approved a connection to settee a securities usurpation lawsuit with the US Securities and Exchange Commission (SEC).

On Aug. 19, MangoDAO submitted the SEC Settlement Offer Proposal to debar further litigation aft the fiscal regulator accused the level of securities violations.

Under the proposal, MangoDAO would wage the SEC $223,228 successful fines, destruct its MNGO token holdings, and question delisting from trading platforms. It added:

“The colony connection would besides hold that the DAO will, and certify compliance, instantly cease each of its offers, income oregon resales of MNGO tokens connected the protocol done the means oregon instrumentalities of interstate commerce successful the United States.”

Crypto lawyer Gabriel Shapiro noted that the SEC typically requires “token issuers” to destruct each “unissued” tokens to dissolve the “common enterprise” and extremity the “investment contract.” However, helium questioned whether delisting the tokens from centralized exchanges genuinely serves investors’ interests.

Meanwhile, the MangoDAO connection emphasized that the colony is neither an admittance nor a denial of wrongdoing.

As of this writing, the connection has reached a quorum with implicit 110 cardinal votes, each successful favour of the settlement.

Mango Market’s downturn

Mango Markets was erstwhile a starring DeFi level connected Solana until Avraham Eisenberg exploited it for $110 cardinal successful 2022. At that time, Eisenberg admitted to the actions but claimed they were legitimate.

Eisenberg was precocious convicted aft being recovered blameworthy of commodities fraud, commodities manipulation, and ligament fraud. He is reportedly seeking a retrial of his case.

Although Eisenberg returned a important information of the funds to MangoDAO, the level has struggled since, with deposits remaining a fraction of their pre-exploit levels. Meanwhile, the incidental besides drew the attraction of regulators, starring to further inquiries into Mango Markets by regulators similar the US SEC.

The MNG token is up 4% successful the past 24 hours according to CryptoSlate data.

The station MangoDAO’s projected SEC colony faces scrutiny implicit imaginable interaction connected investors appeared archetypal connected CryptoSlate.