key takeaways
- Avraham Eisenberg was arrested yesterday in Puerto Rico.
- He is charged with commodity fraud and market manipulation.
- Eisenberg and his team were behind Mango Markets’ $100 million exploit.
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Avi Eisenberg may have been too smart for his own good when he publicly revealed that he was responsible for the Mango Markets exploit back in October. Turns out the FBI was listening.
“A highly profitable business strategy”
The Department of Justice has moved against another notorious crypto figure.
Avraham Eisenberg was reportedly detained yesterday by police in Puerto Rico for his role in the Mango Markets exploit that made him famous on Crypto Twitter in October. the affidavit indicates that Eisenberg faces one count of commodity fraud and one count of commodity tampering.
Mango Markets is a decentralized perpetual exchange on Solana. On October 11, Eisenberg and his business partners coat a large position in the Mango 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 $100 million of its treasury.
The exploiters subsequently tabled a proposal in Mango’s governing forum to return most of the funds (and thus make Mango depositors whole) in exchange for $47 million and a promise to drop any criminal investigation. Shortly after the proposal was approved, Eisenberg Announced on Twitter that he had been responsible for the exploit, stating that he had “operated a highly profitable trading strategy” the previous week.
Eisenberg’s open and brash attitude may not have done him any favors. The affidavit against him specifically mentions Eisenberg’s “highly profitable trading strategy” tweet, along with several others that show Eisenberg was aware of laws prohibiting market manipulation.
So far, the case against Eisenberg concerns only the exploitation of Mango Markets; however, the trader is also suspected by the crypto community of have executed similar schemes in Curve, Fortress DAO and Solend. Other indictments may be on the way.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
