US Jury Finds Crypto Trader Guilty in $110M Mango Markets Manipulation
A federal jury in New York has found Avraham Eisenberg, a 28-year-old crypto trader, guilty of commodities fraud, commodities manipulation, and wire fraud for his actions on the decentralized finance platform Mango Markets.
According to Bloomberg, the verdict, delivered on Thursday, marks the first time a US trial involving criminal charges tied to cryptocurrency manipulation has resulted in a conviction.
Key points:
- On October 11, 2022, Eisenberg faced accusations of exploiting Mango Markets’ rules to steal $110 million from the exchange.
- He used a false identity to trade, driving up the price of Mango’s token, MNGO, and contracts based on its relative value to a stablecoin named USDC.
- Eisenberg then exploited a feature of the exchange that allowed him to “borrow” against his holdings, withdrawing $110 million in cryptocurrencies.
- Days after his big haul, Eisenberg agreed to return $67 million in crypto in exchange for the DAO not prosecuting him.
Read more: Tether Expands Beyond Stablecoins, Launches Four New Business Divisions
Prosecutors argued that the crypto trader had planned the fraud for weeks, manipulating the price of MNGO tokens to trick the system into giving him money. Assistant US Attorney Thomas Burnett stated during closing arguments, “He manipulated that price so he could trick the system into giving him money. He planned to take the money and run.”
Mango Finance hacker executed perfect legal loophole strategy
Eisenberg’s defense attorney, Brian Klein, countered that his client had executed a perfectly legal strategy that was permissible under the rules of the exchange.
Klein argued that Eisenberg engaged in a successful and legal trading strategy, putting his own money at risk and wholly complying with the smart contracts that controlled the decentralized finance platform.
Read more: Binance Set To Re-Enter India After Paying $2 Million Penalty: Report
The platform, Mango Markets, allows users to borrow, lend, and trade cryptocurrencies and is overseen by a decentralized autonomous organization (DAO).
The outcome of this case is likely to have significant implications for the future of cryptocurrency regulation and enforcement in the United States.
