DeFi
Mango Markets insiders hit back at accusations they plundered DAO’s $37 million treasury – DL News
- Two Mango DAO executives said jealous rivals were behind accusations that they were selling MNGO tokens to the DAO at an inflated price.
- Onchain records suggest the pair purchased 333 million tokens belonging to the FTX domain through their trading company, CKS Systems.
- Based on the market value of MNGO at the time of purchase, the tactic will allow sellers to pocket over $3 million.
Mango DAO last month celebrated the conviction by a US jury of Avraham Eisenberg, the crypto trader who stole $115 million from the protocol in 2022.
But now leaders of the DAO, a digital collective that runs the Mango Markets protocol, are pushing back against accusations that they are using their position and influence to profit from the spinoffs.
Mango DAO senior contributors John Kramer and Max Schneider said jealous rivals were behind accusations that the two men worked together to buy 333 million MNGO governance tokens, then pushed through a proposal to to resell them to the DAO at an inflated price.
It is not known at what price the 333 million ONGMs were purchased.
But based on the market value at the time of purchase, the tactic will allow sellers of the token to pocket more than $3 million.
“Mango’s recent upward momentum and the involvement of a long-time strategic partner are simply being misinterpreted by competitors who fear Mango’s ongoing renaissance,” Kramer said. DL News. “Please don’t fall prey to these misguided tactics.”
He did not respond to requests for details about the charges.
“I didn’t lie to anyone,” Schneider said DL Newsadding that everything he did was in the best interest of the DAO.
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“A group of people who have a vested interest in a competing Solana project – marginfi – and who collaborated with Avi in his fraud rampage that damaged numerous projects, including Mango, are trying to slow down this project by sowing distrust,” Schneider says DL News.
Schneider and Kramer declined to say who purchased the MNGO tokens – which were purchased from the collapsed FTX exchange – and why they did not initially disclose what they knew about the situation.
Schneider said on May 3 that he knew who purchased MNGO tokens and called the move an “investment.”
On chain evidence suggests that Schneider and Kramer’s trading company, called CKS Systems, may be behind the purchase.
Wallets connected to both the CKS systems and the MNGO buyer sent and received large amounts of crypto from the same address.
This is the sign that the two entities are identical.
The repurchase
So far, nearly $2.5 million worth of MNGO has been sold back to the DAO in an April buyback, with another buyback planned for May.
The move comes as Mango Markets struggles to recover from the crypto winter and the Eisenberg theft. But the protocol still holds a significant treasure of nearly $37 million.
Mango Markets struggled to recover after trader Avraham Eisenberg exploited the protocol in 2022.
On April 9, Kramer put to a vote a proposal allowing MNGO holders to sell their tokens to the DAO at a purchase price of $0.035 – above the $0.025 price at which MNGO trades on the open market.
If successful, code allowing MNGO holders to sell tokens to the DAO would be automatically deployed to Solana.
Kramer’s proposal was coded so that only MNGO token holders who voted on the proposal could sell tokens to the DAO.
On April 11, a previously unknown portfolio voted yes to the proposal using 333 million NGMOs, shocking the community.
Onchain records show that this wallet received the MNGO through an intermediary who purchased the tokens from the FTX domain.
“Wow, this is super fishy,” pseudonymous Mango DAO member Iwillnotsaveyou said in a Discord post on April 11, shortly after the mystery wallet voted on the proposal.
Schneider and Kramer, who posts under the name DonDuala on Discord, did not respond to questions about the identity of the buyer.
Although the proposal was initially rejected, Kramer re-introduced the proposal, while reassuring the community that it was in the best interest of Mango Market. The proposal was adopted a second time.
April 30, first buyback concluded with sellers agreeing to exchange 72.8 million MNGO for approximately $2.5 million in DAO treasury assets.
Who bought FTX’s MNGO?
However, many found the situation strange.
“Why would you give so much to the seller? Unless you are the seller,” Kevin Heavy, Mango DAO member, said in an X post on May 2.
Heavy pointed out chain records which show a link between Schneider, Kramer and the wallet that bought the 333 million ONGM from FTX.
Schneider and Kramer co-founded CKS Systems last year, which Kramer called a “native DeFi market maker born from the collaboration between Mango Markets and Dual Finance”.
Fearing a shutdown
Schneider said in the article from May 3 that he feared that whoever purchased MNGO tokens from FTX could force the project to shut down. To avoid a shutdown, he enlisted the help of trading companies to purchase the tokens.
“Among all these parties, the one who is truly aligned with and equipped to achieve Mango’s success is the one who purchased the tokens,” Schneider said in his post, without revealing which trading company purchased the tokens.
DL News asked Schneider if CKS Systems purchased MNGO tokens from FTX. He declined to comment.
All the while, Schneider and Kramer characterized the Mango Markets community’s reaction to the situation as that of their competitors working against them.
But many members of the Mango community do not accept this explanation.
Donderper, a pseudonymous member of Mango DAO, said on Discord: “What we are seeing happening here is not right and something needs to be done about it. »
Tim Craig is a DeFi correspondent at DL News. Do you have any advice? Send him an email to tim@dlnews.com.