Mango Markets, a decentralized exchange built on the Solana blockchain, is facing potential fines amounting to $500,000 as it seeks to resolve allegations from the Commodity Futures Trading Commission (CFTC). Legal representatives for Mango Markets submitted a proposal on September 22 to the Mango Decentralized Autonomous Organization (DAO), underscoring the existence of an ongoing investigation by the CFTC, suggesting that settling the matter financially could be a prudent move.
The CFTC has raised concerns regarding Mango Markets for allegedly not registering as a commodities exchange, offering services unlawfully to U.S. customers, and lacking adequate Know Your Customer (KYC) protocols. Due to the confidential nature of this pending settlement, detailed information about the case remains undisclosed. However, DAO representatives have indicated that agreeing to the settlement would prevent potential litigation against the DAO.
The proposal for the settlement is currently gaining traction, with overwhelming support from DAO members—123,475,000 votes in favor as opposed to none against. This is not an isolated incident; in fact, it marks the second occasion within a brief period that Mango DAO has considered paying significant funds to mitigate regulatory scrutiny.
In a previous instance, on August 19, the DAO agreed to settle with the SEC over allegations of violating U.S. securities laws. Following this, on August 26, the DAO transferred $670,000 in USD Coin to resolve claims that it had sold its MNGO token without proper registration during 2021.
Mango Markets has encountered ongoing challenges following a significant security breach in October 2022, where a trader exploited the platform, leading to substantial financial losses and heightened regulatory scrutiny from multiple agencies. This incident has had lasting effects on confidence in the platform and its operations.
