Mango Markets Announces January 2025 Closure After $117M Hack

TLDR

• Mango Markets, a Solana-based DeFi platform that lost $117 million in a 2022 hack, will shut down completely after unanimous governance approval
• Users must close their positions by January 13, 2025, at 8 PM UTC when the shutdown becomes executable
• The platform is implementing strict lending parameter changes, including reducing lending ratios and increasing collateral requirements
• Attacker Avraham Eisenberg used $5 million in USDC to manipulate MNGO token price by 1,000%, enabling him to drain the protocol
• Legal proceedings against Eisenberg began in October 2024, with potential 25-year imprisonment for fraud charges

The Solana-based decentralized finance platform Mango Markets has announced its complete shutdown, marking the final chapter in a story that began with a $117 million exploit in October 2022. The platform’s governance community has voted unanimously to close operations, with 23,347,212 votes supporting the shutdown proposal.

Users of the platform now face a critical deadline of January 13, 2025, at 8 PM UTC to close their positions. This timing coincides with when the shutdown proposals become executable, leaving users with a narrow window to manage their assets.

In preparation for the closure, Mango V4 is implementing sweeping changes to its lending parameters. The target lending ratio will see a dramatic reduction from 50% to 0.1% of deposits, making it increasingly difficult for users to maintain positions on the platform.

The protocol is also introducing steep interest rate increases across several major cryptocurrencies. These changes affect popular assets including SOL, USDC, USDT, ETH, MSOL, mangoSOL, and INF. For users looking to open new positions, the barriers to entry have increased substantially, with collateral requirements now ten times higher than previous levels.

The story of Mango Markets’ downfall traces back to October 2022, when attacker Avraham Eisenberg executed a sophisticated price manipulation scheme. Using an initial capital of just $5 million in USDC, Eisenberg managed to artificially inflate the MNGO token price by approximately 1,000%.

Mango Markets will be shutting down
It is time for users to close their positions

Mango v4 & Boost are winding down. Most borrowing on Mango will be economically unviable going forward

Proposals are live & become executable on January 13, Monday 8PM UTC

Details below

— Mango (@mangomarkets) January 11, 2025

Through this manipulation, Eisenberg created an environment where he could borrow against greatly inflated collateral values. This strategy ultimately enabled him to drain $117 million from the protocol, leaving the platform in a precarious position.

Following the attack, the Mango Markets team attempted to negotiate with Eisenberg. They offered a bug bounty in exchange for the return of the stolen funds, highlighting the desperate situation the platform found itself in.

Eisenberg initially defended his actions, characterizing them as a “highly profitable trading strategy” rather than an attack. He even attempted to negotiate keeping a portion of the stolen funds through a governance proposal, showing a bold stance despite the clear impact on the protocol’s users.

The legal system eventually caught up with Eisenberg. In October 2024, legal proceedings began against him, bringing charges of fraud and market manipulation. If convicted, he faces up to 25 years in prison for his actions against the platform.

The governance vote that sealed Mango Markets’ fate showed complete unity among voting members. The unanimous decision to shut down operations reflects the community’s acceptance of the platform’s inability to recover from the 2022 exploit.

For current users, the platform’s new parameters create urgent pressure to exit their positions. The increased collateral requirements and higher interest rates serve as strong incentives for users to close their accounts before the January deadline.

The technical changes being implemented include adjustments across all supported cryptocurrencies. These modifications affect both lending and borrowing capabilities, essentially making it impractical for users to maintain or open new positions on the platform.

Mango V4’s parameter changes represent the final technical steps toward complete shutdown. The reduction in lending ratios to near-zero levels effectively stops new lending activity on the platform.

The shutdown process includes strict timelines for user exits. After the January 13 deadline, the platform’s ability to process transactions will cease, making it impossible for users to access their positions through normal means.

Interest rates across all supported cryptocurrencies will see substantial increases. This change affects both existing and potential new positions, creating additional pressure for users to close their accounts before the deadline.

The last active day of trading will mark the end of Mango Markets’ operations in the DeFi space. Users have until 8 PM UTC on January 13, 2025, to finalize all transactions and close their positions.

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