Mango Labs has filed a lawsuit against John Kramer and Maximilian Schneider, accusing them of embezzling $10 million from the Mango decentralized autonomous organization (DAO). The lawsuit claims the two exploited their trusted positions to profit from the DAO's purchase of bankrupt FTX’s MNGO governance tokens. According to Mango Labs, unknown individuals also assisted in the scheme, with the promise of serving them legal papers through their crypto wallets if identified.

Kramer and Schneider allegedly bought FTX’s MNGO tokens on April 1, 2024, under the pretense of securing them for the DAO at a favorable price. They secretly deposited the tokens into the DAO's treasury, then proposed a scheme where DAO members unknowingly purchased the tokens at an inflated price, ultimately paying $2.5 million for 72.8 million MNGO tokens. Despite the fraud being discovered, Mango Labs claims that the defendants refused to return the tokens and continued pressuring the DAO to back off.

The lawsuit accuses Kramer and Schneider of fraud, breach of fiduciary duty, and unjust enrichment. Mango Labs is seeking monetary damages, including the return of the unlawfully obtained funds, along with punitive damages. The case comes as Mango DAO continues to be under investigation by U.S. authorities due to separate legal issues.

This latest lawsuit follows the conviction of Avraham Eisenberg, who was found guilty of exploiting Mango DAO for $110 million in a separate case. Additionally, Mango DAO recently settled with the U.S. Securities and Exchange Commission (SEC), agreeing to pay $700,000 in penalties and destroy all remaining MNGO tokens.