Mango Labs Accuses Two Mango DAO Leaders of Misappropriating $10 Million During Avraham Eisenberg Trial

On October 10, DLNews reported that just weeks after settling a lawsuit with the SEC, Mango Labs, the company behind the Mango Markets agreement, has filed its own legal action. The lawsuit, filed Oct. 7 in Puerto Rico, alleges that John Kramer and Max Schneider, senior contributors to the Mango DAO, stole more than $10 million from the DAO at the expense of other members during the Avraham Eisenberg trial. The lawsuit states, “Defendants breached their fiduciary duties by secretly purchasing MNGO tokens (333 million) from FTX, manipulating the MNGO market to artificially inflate the price of their tokens, and selling them to the Mango DAO through the Proposal at an even higher price.” Kramer and Schneider deny any wrongdoing.

In addition to the lawsuit, on-chain evidence suggests that Kramer and Schneider's trading firm, CKS Systems, was behind the acquisition of the MNGO tokens. The lawsuit also claims that Kramer and Schneider tried to prevent Mango Labs from obtaining legitimate funding after being accused of misappropriating funds. “They threatened to prevent Mango Labs from funding the defense of Mango DAO's legal rights, including those against Eisenberg,” the lawsuit states. Additionally, after Mango Labs settled with the SEC, Schneider made a DAO proposal to give himself 60 million MNGO tokens from the DAO vault, in violation of the terms of the SEC settlement. It remains to be seen whether this move will affect the settlement (which is subject to court approval).

This follows yesterday's news that Mango failed to pass a proposal to accept a settlement with the US SEC, suspected due to a withdrawal of the proposal .