key takeaways
- Mango Labs, the company behind the criminal decentralized exchange Mango Markets, filed a lawsuit against Avraham Eisenberg.
- The company is seeking restitution for the $47 million Eisenberg allegedly siphoned off from it, plus interest.
- Eisenberg confessed to the exploit in October on Twitter.
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Applied game theorist Avraham Eisenberg is being sued by Mango Labs for exploiting his protocol in October. He already faces charges from the Department of Justice, the Commodity Futures Trading Commission and the Securities and Exchange Commission.
Mango Markets retaliates
Avraham Eisenberg’s problems continue to worsen.
Mango Labs, the company behind Mango Markets, the Solana-based decentralized perpetual exchange, filed a lawsuit against Avraham Eisenberg yesterday. He is seeking full restitution of the $47 million Eisenberg allegedly took from the protocol, as well as interest, as of the day of the attack.
Mango Markets was exploited on October 11. The attacker took a large position in the protocol’s perpetual futures contracts, artificially inflating the price of the illiquid MNGO token from $0.3 to $0.91. They then used their significant unrealized profits as collateral to borrow the protocol’s assets and siphoned off more than $114 million from its treasury. The attacker then offered to reinstate $67 million to make users of the protocol complete, on the condition that Mango Markets would not file criminal charges against them.
Soon after, Eisenberg publicly confessed to orchestrating the attack. “I was involved with a team that ran a highly profitable trading strategy last week,” he said. fixed on Twitter, arguing that it had simply used Mango Markets in the way it was designed, and had not done anything illegal.
However, the Justice Department did not see things the same way, and Eisenberg was arrested in Puerto Rico on December 27. The Justice Department charged him with one count of commodity fraud and one count of commodity tampering. The Commodity Futures Trading Commission and the Securities and Exchange Commission have also filed their own charges against Eisenberg.
Eisenberg was recently denied bail by a Puerto Rican court: the judge ruled that he constituted a flight risk due to his strong family ties outside the United States.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
