Mango Markets has announced its shutdown after a series of governance proposals, settlements with regulators, and ongoing legal battles. This decentralized exchange, once seen as a promising option on the Solana network, will cease to function and urges current users to settle any remaining positions.
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Early Ambitions and Rapid Growth
Mango Markets began in 2021 with bold aims. Its founders introduced a governance token, MNGO, and promised faster transactions than platforms on older blockchain networks. They positioned the protocol as a place for secure trading and lending, backed by the convenience and efficiency that blockchain technology can offer. In a short time, Mango Markets drew a substantial user base. Its total value locked rose above $200 million at one stage, reflecting strong interest in low-fee trading.
That energetic start was tempered by an event in late 2022 that shook the project’s reputation. A well-known trader, Avraham “Avi” Eisenberg, managed to exploit weaknesses in the platform’s design. He manipulated prices within the protocol’s margin trading system and extracted a large sum of user funds, often cited around $110 million.
The 2022 Exploit and Ongoing Consequences
The Eisenberg exploit went beyond a simple hack or glitch. It brought forward questions about the design of decentralized exchanges and their capacity to handle extreme scenarios. Although a portion of the funds was recovered following negotiations, a massive shortfall lingered. Investors worried about whether losses would be repaid, and many wondered if Mango Markets had the capability to prevent this from happening again.
Legal repercussions soon followed. Eisenberg was arrested by United States authorities and faced multiple charges linked to fraud and market manipulation. A trial date was postponed several times, partly because the legal issues are complicated and set new precedents for how regulators might handle exploits on decentralized platforms.
Settlement with the SEC
In September 2024, the U.S. Securities and Exchange Commission reached a settled agreement with Mango Markets’ decentralized autonomous organization. Regulators claimed the original token sale was an unregistered securities offering. They also alleged that the project had been acting as an unregistered broker.
The total penalties reached hundreds of thousands of dollars, and the DAO was instructed to destroy MNGO tokens and ask exchanges to remove the token from trading. This financial burden arrived as Mango Markets was still trying to recover from user outflows linked to the exploit. While the settlement was not a bankruptcy filing, the required penalties and forced token delistings put the protocol’s future under immediate pressure.
Governance Votes and the Final Closure
Community members behind Mango Markets tried to keep the project afloat. They put forward governance votes that aimed to adjust interest rates, introduce new collateral requirements, and reduce borrowing. Users who followed these proposals saw them as last-ditch efforts to stabilize the system. When those votes passed, they effectively blocked core features that had once made Mango a hub for margin trading. The platform’s administrators then announced that Mango Markets would shut down.
Final Reflections
Shutting down Mango Markets may feel like an abrupt finale, but the events leading up to it stretched over several months. The platform grappled with repayment demands, user mistrust, plummeting liquidity, and a regulatory settlement that sealed its fate. In the end, the project that once drew attention for its speed and low fees decided it had run out of feasible options. This moment will likely be cited as a cautionary tale for future protocols aiming to operate in the decentralized finance space.
What began with a bright promise to revolutionize trading reached a point where legal settlements and overwhelming financial strain closed the doors. Many participants will wonder what could have been done differently.
Tapioca DAO is another decentralized platform that fell victim to a devastating hack. We covered the attack here – the TAP token never managed to recover and remains nearly 98% down since the incident.
