Avi Eisenberg, also known as Avraham Eisenberg, is under investigation for a suspected $110 million fraud scheme on the Solana decentralized exchange, Mango Markets. This deceitful act has been compared to a fake diamond ring scam by the authorities, according to a report published by Inner City Press on April 9th.
Judge: Alright, let’s begin with opening statements. Ms. Huang, please go ahead:
— Inner City Press (@innercitypress) April 9, 2024
On October 11, 2022, an Assistant Attorney from the United States charged Eisenberg with fraud and market manipulation. As a result, the price of the associated cryptocurrency surged by an astounding 1,000% within just 20 minutes.
According to Eisenberg’s defense, the actions he took were valid trading tactics, not illegal activities. Lawyer Sanford Talking explained that Eisenberg invested $13 million of his personal funds openly in market transactions, which could be observed by everyone.
Mango Markets’ native token, MNGO, was manipulated to inflate its value, allowing someone to borrow over $110 million using it as collateral. This drained the exchange’s resources. Although $67 million was returned, Eisenberg is being sued for an additional $47 million and accrued interest.
According to crypto legal expert Gabriel Shapiro, the decision in this case could significantly influence the decentralized finance (DeFi) sector. The central issue is whether Eisenberg’s conduct breached the implicit terms of loan agreements within the DeFi ecosystem.
This example from the case underscores the intricacies and potential consequences of DeFi law, impacting both traders and platforms. The judgment could establish significant guidelines for future cryptocurrency transactions.
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2024-04-10 08:04