The dispute between Mango Markets and hacker Avi Eisenberg is still not over

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Cryptocurrency thief Avi Eisenberg will go on trial in the coming months for stealing more than $100 million from Mango Markets. But Mango Markets still faces the risk of legal investigation.

The decentralized cryptocurrency exchange (DEX) is facing “regulatory requirements” in the United States due to a theft in October 2022, according to a post on the project’s main Discord channel. Now the DEX’s governing body, MangoDAO, is voting on whether to appoint a representative who can handle “U.S. regulatory matters” on their behalf.

Mango Markets is the leading on-chain trading destination for cryptocurrency investors on the Solana network. The company subsequently lost millions of dollars to Eisenberg, an activist trader who allegedly used illegal market manipulation to steal funds from other Mango Markets customers.committee U.S. Securities and Exchange Commission, Commodity Futures Trading Commission and judicial The pair also sued the trader Founder Courtesy of Mango Market.

While many Solana protocols operate within the booming crypto market, Mango Markets had to answer questions from regulators who turned their attention to the following DEXs when it fell victim to an attack. The posts did not name the regulator raising the issue, but a proposal on the ballot describes issues that need to be addressed in the SEC, CFTC and DOJ investigations into Eisenberg.

This situation highlights the dangers of creating permissionless transaction infrastructure on the blockchain and entrusting its operations to decentralized autonomous organizations (DAOs). If cryptocurrency founders thought these attributes would protect them from legal scrutiny, precedent proves otherwise. Both the SEC and CFTC sued the DAO in 2023.

Legal experts have previously said Mango Markets’ position in the cryptocurrency market makes it vulnerable to U.S. legal security. As discussed in various lawsuits against Eisenberg, it provided trading services to the United States that regulators considered regulated.

Further complicating the current financial situation, the DEX’s former legal custodian, Mango Labs, is on the sidelines. CEO Dafydd Durairaj said on Mango’s main Discord channel on Thursday that his company “may suffer a conflict of interest due to strict legal terms” that would prevent it from participating in the DEX.

This position is different from a year ago, when Durairaj and The DEX community stated that Mango Labs is committed to defending itself “even if the SEC wants to file a lawsuit.”In return, the community voted multiple times to provide Mango Labs with millions of dollars in cryptocurrency for payment Legal costs keep risingaccording to this postal hosted on the forum.

Mango Markets’ community of token holders have the power to govern the DEX and approve any changes to its operations using their MNGO tokens. They were informed of the “legal issue” in a Discord post on Wednesday and offered a solution.

Adrian Brzeziński, a 29-year-old cryptocurrency developer and long-time contributor to Mango Markets, recommended his 3-month-old company, cyberbytesserving as DEX’s representative to regulatory agencies.

CyberByte will have the right to retain DEX’s attorneys and “engage in confidential and privileged communications with legal counsel to facilitate the amicable resolution of U.S. legal matters.” Ky.

According to Brzeziński’s post, the DEX’s community of voters, token holders, will have the final say on any “solution.” He is seeking $250,000 to cover new legal fees.

on Friday, vote His proposal was unanimously approved by participating token holders.