The CFTC has charged Mango Markets for failing to register as a commodities exchange, illegally offering services to U.S. customers, and lacking proper customer identity verification measures.

A representative from the Mango DAO indicated that due to the confidentiality of the settlement and ongoing investigations, full details cannot be disclosed publicly.

Mango Markets, a decentralized exchange operating on the Solana blockchain, is currently negotiating a potential $500,000 civil penalty with the Commodity Futures Trading Commission (CFTC) to resolve regulatory issues.

The regulatory scrutiny surrounding Mango Markets intensified after a major hack in November 2022, which involved trader Avi Eisenberg manipulating the market, prompting investigations by the SEC, DOJ, and CFTC.

Despite recovering some funds from the hack, Mango Markets has incurred over $148,000 in legal fees related to ongoing investigations.

This proposed settlement marks the second significant payment proposal from Mango DAO in just over a month, following a $670,000 settlement with the SEC for selling its MNGO token as an unregistered security.

In August, the DAO transferred $670,000 in USDC to the SEC to settle claims related to the unregistered sale of its MNGO token in 2021.

Mango Markets has struggled to recover financially and reputationally since the $110 million exploit in October 2022, which was also linked to Eisenberg's market manipulation.

Currently, the proposal is gaining traction within the DAO, with over 123 million votes in favor and no opposition.

For the settlement to proceed, it requires approval from holders of the MNGO governance token and subsequent acceptance by the CFTC's commissioners.

If the settlement is accepted, Mango DAO would neither admit to nor deny any wrongdoing, aiming to avoid further litigation with the CFTC.

The settlement proposal was made on September 22 by Mango Markets' legal team to the Mango DAO, emphasizing the ongoing investigation by the CFTC.