Mango Markets Exploiter Found Guilty Of Fraud And Manipulation

Avraham Avi Eisenberg, who is known for exploiting the Mango Markets, has been found guilty of committing fraud and manipulating the markets in this case, according to a federal court in Manhattan.

In October 2022, Mango Markets suffered a hack due to manipulation of their native MNGO token’s price, resulting in a financial loss of approximately $110 million.

Mango Markets Hacker Convicted 

Prosecutors stated that Avraham Eisenberg, a crypto trader, operated under a false identity and allegedly engaged in market manipulation to drive up the price of the platform’s native MNGO token and related contracts. Eisenberg ultimately exploited an exchange feature and withdrew $110 million in cryptocurrency with no plans to repay the funds in question. Prosecutors stated that Eisenberg manipulated the price of the MNGO token to trick the system and acquire illicit funds while perpetrating a deliberate and well-thought-out fraud against Mango Markets. Assistant US Attorney Thomas Burnett sought to convince the jury of Eisenberg’s intentions to “take the money and run,” alleging the fraud was meticulously planned and executed. Following the exploit, Eisenberg submitted an anonymous proposal to Mango Market’s decentralized autonomous organization (DAO). He offered to return $67 million of the stolen funds in the proposal. In exchange, he wanted to keep the remaining $43 million, along with a promise of no legal action by Mango Markets. 

Eisenberg decamped for Israel from Puerto Rico, but the Mango Markets DAO declined his proposition. Upon returning to Puerto Rico, Eisenberg was arrested by US law enforcement and has been detained pending trial, with the magistrate deeming him a potential fugitive.

Eisenberg’s Defense 

Eisenberg’s defense team was led by crypto lawyer Brian Klein, who argued that his client’s trades on Mango Markets were lawful, compliant with the decentralized protocol’s rules at the time, and fully aligned with the protocol’s functionalities. However, the prosecution could counter every argument, arguing that Eisenberg had malicious intent from the beginning. To bolster their argument, the prosecution also presented evidence of Eiseberg’s internet search history related to market manipulation and fraud and highlighted his attempt to flee to Israel following the exploit. After deliberations, the jury concluded that Eisenberg had taken advantage of an ineffective price oracle to deceive the system.

Based on the jury’s decision, Eisenberg’s actions were deemed fraudulent. Consequently, he was found guilty of all charges and could potentially spend up to 20 years in prison. However, the length of his sentence has not been decided yet. During the trial, Eisenberg did not take the stand but worked closely with his lawyers, making notes and discussing questions with them. After the verdict, there was a significant increase in the value of the MNGO token, rising by more than 11% within the last 24 hours.

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2024-04-19 12:06