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Mango Markets Exploiter Eisenberg Arrested in Puerto Rico
The investor drained $110 million in cryptocurrencies from the platform.
Avraham Eisenberg, the crypto investor whose “highly profitable trading strategy” drained DeFi trading platform Mango Markets of crypto worth $110 million, was arrested Monday in Puerto Rico, court documents said.
The self-described game theorist admitted his role in draining Mango Markets’ treasury shortly after the incident in mid-October, and may now be the first U.S. resident to face charges for his role in manipulating a decentralized-finance trading platform.
STORY CONTINUES BELOW
Eisenberg faces charges of commodities fraud and commodities manipulation, according to a filing unsealed Tuesday. The charges could see punishments ranging from fines to prison time.
A deposition signed by FBI Special Agent Brandon Racz alleges Eisenberg “willfully and knowingly” manipulated the sale of a commodity – namely futures contracts on Mango Markets.
“Eisenberg engaged in a scheme involving the intentional and artificial manipulation of the price of perpetual futures contracts on a cryptocurrency exchange called Mango Markets, and other manipulative and deceptive devices and contrivances.”
Read more: $114M Mango Markets Exploiter Outs Himself, Returns Most of the Money
Eisenberg was arrested Monday night in Puerto Rico, according to a second filing signed by Assistant U.S. Attorney Thomas Burnett.
According to the unsealed complaint, Eisenberg manipulated the price of perpetuals contracts (a type of futures contract popular in crypto markets) for Mango Markets’ native token MNGO. He sold massive amounts of MNGO perpetuals contracts to himself, thus pumping the price of those contracts 1,300% in less than an hour.
Up big time, Eisenberg then borrowed against the value of his position and “withdrew essentially all of the cryptocurrency deposits on the Mango Markets platform.” He made $110 million, according to the complaint.
Statement on recent events:
— Avraham Eisenberg (@avi_eisen) October 15, 2022
I was involved with a team that operated a highly profitable trading strategy last week.
The platform became “insolvent” as a result, the deposition said, quoting Eisenberg’s own Twitter account.
In the wake of the trade, Eisenberg negotiated with Mango Markets and agreed to return $67 million to the decentralized autonomous organization (DAO) governing it. Mango DAO planned to return those funds to users who were affected by Eisenberg’s attack.
News of Eisenberg’s arrest sparked celebratory memes on Mango Markets’ Discord server.
Danny Nelson
Danny is CoinDesk's managing editor for Data & Tokens. He formerly ran investigations for the Tufts Daily. At CoinDesk, his beats include (but are not limited to): federal policy, regulation, securities law, exchanges, the Solana ecosystem, smart money doing dumb things, dumb money doing smart things and tungsten cubes. He owns BTC, ETH and SOL tokens, as well as the LinksDAO NFT.
Nikhilesh De
Nikhilesh De is CoinDesk's managing editor for global policy and regulation, covering regulators, lawmakers and institutions. When he's not reporting on digital assets and policy, he can be found admiring Amtrak or building LEGO trains. He owns < $50 in BTC and < $20 in ETH. He was named the Association of Cryptocurrency Journalists and Researchers' Journalist of the Year in 2020.
