As a seasoned analyst with years of experience navigating the complex and often tumultuous world of cryptocurrencies, I must say that Mango Markets seems to be no stranger to regulatory investigations and hefty settlements. The latest allegation from the Commodity Futures Trading Commission (CFTC) adds another layer of complexity to this already intricate tale.
Mango Markets, a decentralized cryptocurrency exchange, has already survived a costly hack that resulted in millions of dollars in losses and subsequent regulatory probes. Now, it appears they might face another setback: a hefty fine totaling six figures from the Commodity Futures Trading Commission (CFTC).
The cryptocurrency derivatives trading platform is under investigation by the Commodity Futures Trading Commission (CFTC) for several alleged violations. These include operating without proper registration as a commodities exchange, offering illegal services to U.S. residents, and failing to verify the identities of its users, as suggested in their Discord server discussions and outlined on their governance page. This platform facilitates trading in perpetual futures contracts.
On Sunday, it was announced that Mango Markets’ legal representative revealed an investigation and suggested a resolution. According to this resolution, Mango DAO, the governing body of Mango Markets, agreed to pay a $500,000 fine to the Commodity Futures Trading Commission (CFTC). Mango DAO did not acknowledge or deny any misconduct but chose to settle pending litigation.
The agreement hasn’t been finalized yet. It requires approval from the owners of Mango Markets’ governance token, MNGO. Currently, the proposal seems to be moving towards almost unanimous approval. Once it gets past that stage, the settlement offer then needs to be accepted by the Commissioners of the Commodity Futures Trading Commission (CFTC).
Mango DAO has faced regulatory issues before, as recently as last month they decided to pay a substantial settlement of six figures to the Securities and Exchange Commission. Subsequently, they transferred approximately $700,000 worth of stablecoins to settle a fine associated with claims that they were selling MNGO without proper registration as a security.
Approximately one month before FTX’s November 2022 crash drastically impacted Decentralized Finance (DeFi) exchanges on Solana, Mango Markets experienced a catastrophe of its own. The self-proclaimed game theorist Avi Eisenberg successfully executed a “highly profitable” manipulation scheme, which depleted the exchange’s assets and eventually led to his incarceration.
Despite retrieving some funds from Eisenberg, Mango Markets didn’t manage to regain its financial stability or tarnished reputation following the incident. This event also attracted attention and investigation from several U.S. regulatory bodies, most notably the Commodity Futures Trading Commission (CFTC).
According to a recent post on Mango DAO’s Discord server by their legal advisor, they have accumulated approximately $148,176 in legal fees and an additional $78,000 in related costs while navigating through complex legal issues.
The CFTC did not immediately respond to CoinDesk.
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2024-09-24 00:06