Mango Markets Exploiter Arrested For Fraud

Mango Markets Exploiter Arrested For Fraud

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The crypto trader behind the infamous Mango Markets exploits had previously claimed that his actions were legal and part of a profitable trading strategy. 

FBI Files Fraud Charges

Law enforcement has arrested the infamous Mango Markets hacker, Avraham Eisenberg, who had claimed responsibility for the attack and stated that his actions were not illegal at all. However, his claims of “legal open market actions” seem unfounded, as he has been charged with market manipulation and fraud. 

A previously sealed complaint filed with the Southern District of New York was made public recently, revealing that the FBI had charged Eisenberg with one count of commodities fraud and one count of commodities manipulation in the Mango Markets case. 

Eisenberg’s Mango Market Takedown 

The takedown of the crypto exchange took place in the month of October 2022, which is already being touted as “Hacktober” in the crypto circles due to the overwhelming number of hacks and exploits. Eisenberg targeted the platform’s native token, MNGO, and artificially inflated its price with respect to the USDC. His team then proceeded to take significant loans against their inflated collateral, thus draining the Mango treasury of cryptocurrencies worth $110 million. Eisenberg had, however, never attempted to hide his identity or his actions, claiming that whatever profits he had gained were part of a regular trading activity. In fact, he had even entered into negotiations with the Mango team immediately after the maneuver to discuss the return of the funds. Days later, the Mango team revealed that around $67 million of various crypto assets had been returned to the exchange treasury. 

FBI Deems Eisenberg Guilty

However, the FBI did not buy into Eisenberg’s claims of the entire exploit being just a “profitable trading strategy.” on December 23, the federal agency lodged a formal complaint alleging that Eisenberg had wilfully and knowingly manipulated the market and committed fraud through intentional and artificial manipulation of the price of the perpetual futures on Mango Markets. The funds that he drained from the exchange’s treasury came directly from the deposits of other investors. 

In fact, according to FBI special agent Brandon Racz. Eisenberg was aware of the illegality of his actions as he had left the country for Israel the day after the exploit. 

Racz said, 

“Based on the timing of the flight, the travel appears to have been an effort to avoid apprehension by law enforcement in the immediate aftermath of the Market Manipulation Scheme…Due to [Eisenberg’s] withdrawals, other investors with deposits on Mango Markets lost much, or all, of those deposits.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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