Mango Markets: Avraham Eisenberg accused of fraud and market manipulation

Avi Eisenberg may have been too smart for his own good when he publicly revealed that he was responsible for the Mango Markets exploit in October. It turns out the FBI was listening to him.

“A very profitable trading strategy.”

The Department of Justice has taken action against another notorious crypto figure.

Avraham Eisenberg was reportedly apprehended by law enforcement yesterday in Puerto Rico for his role in the Mango Markets hack that made him famous on Crypto Twitter in October. The affidavit states that that Eisenberg is facing a charge of fraud and commodity manipulation.

Mango Markets is a decentralized exchange on Solana. On October 11, Eisenberg and his accomplices were arrested. They took a large position in Mango’s perpetual futures contracts, artificially inflating the price of the illiquid MNGO token from $0.3 to $0.91. They then used their large unrealized profits as collateral to borrow the protocol’s assets, and drained more than $100 million of its cash.

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The hackers then submitted a proposal in Mango’s governance forum to return the majority of the funds (and thus make Mango’s depositors whole) in exchange for $47 million and a promise to drop all criminal investigations. Shortly after the proposal was passed, Eisenberg announced on Twitter that he was behind the hack, famously stating that he had “implemented a very profitable business strategy” the week before.

Eisenberg’s open and brazen attitude may not have done him any favors. The affidavit against him specifically mentions the tweet “highly profitable trading strategy” by Eisenberg, as well as several others that show that Eisenberg was aware of the laws prohibiting market manipulation.

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So far, the case against Eisenberg is only about the Mango Markets hack; however, the trader is also suspected by the crypto community of manipulating the markets and of having set up similar systems on Curve, Fortress DAO, and Solend. Other charges may be pending.

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