Mango Markets insiders hit back at accusations they’re raiding the DAO’s $37m treasury

Mango DAO celebrated last month when a US jury convicted Avraham Eisenberg, the crypto trader who stole $115 million from the protocol in 2022.

But now leaders of the DAO, a digital collective that manages the Mango Markets protocol, are pushing back against accusations that they’re using their positions and influence to profit from the fallout.

Senior Mango DAO contributors John Kramer and Max Schneider said jealous rivals are behind accusations that the two worked together to buy 333 million MNGO governance tokens, then pushed through a proposal to sell them back to the DAO at an inflated price.

It’s not known what price the 333 million MNGO were bought for.

But based on the market value at the time of the purchase, the tactic will allow the sellers of the token to pocket over $3 million.

“Mango’s recent upward momentum and involvement of a long-standing strategic partner is simply being misconstrued by competitors who are fearful of Mango’s ongoing rebirth,” Kramer told DL News. “Please don’t fall prey to these misguided tactics.”

He did not respond to requests to elaborate further on the accusations.

“I didn’t lie to anyone,” Schneider told DL News, adding that everything he has done was in the DAO’s best interests.

”A group of people who have a vested interest in a competing Solana project — marginfi — and collaborated with Avi on his rampage of fraud that damaged a lot of projects, including Mango, are trying to slow this project down by seeding mistrust,” Schneider told DL News.

Schneider and Kramer have declined to say who bought the MNGO tokens — which were purchased from the estate of collapsed exchange FTX — and why they didn’t initially disclose what they knew about the situation.

Schneider said on May 3 he knew who purchased the MNGO tokens and called the move an “investment.”

Onchain evidence suggests that Schneider and Kramer’s trading firm, called CKS Systems, may be behind the purchase.

Wallets connected to both CKS Systems and the MNGO buyer have sent and received large amounts of crypto from the same address.

That is a sign that the two entities are the same.

The buyback

So far, almost $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 bounce back from the crypto winter and Eisenberg’s theft. But the protocol still holds a substantial treasury of almost $37 million.

On April 9, Kramer put to a vote a proposal for MNGO holders to sell their tokens to the DAO at a purchase price of $0.035 — above the $0.025 price MNGO traded at on the open market.

If successful, code allowing MNGO holders to sell tokens to the DAO would be automatically deployed on Solana.

Kramer’s proposal was coded so that only MNGO token holders who voted on the proposal would be able to sell tokens to the DAO.

On April 11, a previously unknown wallet voted yes on the proposal using 333 million MNGO, shocking the community.

Onchain records show this wallet received the MNGO through an intermediary who bought the tokens from the FTX estate.

“Wow, this is super shady,” 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 voted down initially, Kramer ran the proposal again, while reassuring the community that it was in Mango Market’s best interest. The proposal passed the second time around.

On April 30, the first buyback concluded with sellers agreeing to exchange 72.8 million MNGO for around $2.5 million of the DAO’s treasury assets.

Who bought FTX’s MNGO?

Still, many found the situation strange.

“Why would you donate so much to the seller? Unless you are the seller,” Kevin Heavy, a Mango DAO member, said in an X post on May 2.

Heavy pointed to onchain records that show a connection between Schneider, Kramer, and the wallet that bought the 333 million MNGO from FTX.

Schneider and Kramer last year co-founded CKS Systems, which Kramer called a “DeFi native market-maker born out of collaboration between Mango Markets and Dual Finance.”

Fearful of a shutdown

Schneider said in the May 3 post that he was fearful that whoever bought FTX’s MNGO tokens could force a shutdown of the project. To prevent a shutdown, he sought help from trading firms to buy the tokens.

“From all those parties, the one that really is aligned with Mango’s success and equipped to reach it, is the one who bought the tokens,” Schneider said in the post, without disclosing which trading firm bought the tokens.

DL News asked Schneider if CKS Systems bought FTX’s MNGO tokens. He declined to comment.

All the while, both Schneider and Kramer have characterised the Mango Markets community’s reaction to the situation as their competitors working against them.

But many in the Mango community don’t buy that explanation.

Donderper, a pseudonymous Mango DAO member, said on Discord: “What we see happening here is not right and something needs to be done about it.”

Tim Craig is a DeFi Correspondent at DL News. Got a tip? Email him at tim@dlnews.com.