Mango DAO Votes To Let Hacker Keep Nearly $50M Of Stolen Funds

After an attacker drained $116M two days ago from Mango Markets, the Solana-based margin trading and lending platform, they have struck a deal with the Mango DAO to keep nearly $50M of pilfered assets.

The agreement on Mango’s governance forum passed with nearly 97% of voters in favor.

The proposal says that holders of MNGO, the protocol’s native token, won’t pursue criminal investigations or attempt to freeze funds if the agreed-upon tokens are returned. The assets would be used to pay off any bad debt caused by the exploit.

Tyler Reynolds, an angel investor and advisor to many crypto projects, called the result of the vote “moronic,” because, according to Reynolds, the hacker’s true identity is known and he wouldn’t be compelled to return any funds if he hadn’t broken the law. 

Others echoed Reynold’s sentiment in the comments section of the governance vote, criticizing what they see as low-quality negotiating on the part of the Mango team.

A dissenter who voted NO with over $100K of MNGO

Others who voted in favor of the proposal think it’s better to get some money back to the protocol’s users quickly, but question whether Mango can continue operating considering it will be eating a loss of roughly $49M.

Hard To Prove

Doug Colkitt, the founder of the decentralized exchange CrocSwap, thinks settling with the attacker is the right move, even if his identity can be proven.

Colkitt’s argument lies in the fact that the hacker did not have access to any unauthorized access to a computer system, which would make it difficult to prosecute as “computer fraud.”

Instead, the hacker would need to be prosecuted for “securities fraud,” which as Colkitt wrote on Twitter, is very hard to prove at the level needed for a criminal conviction.