Crypto Trader Behind $110,000,000 Mango Markets Exploit Convicted on Fraud Charges

A jury has unanimously found the trader behind the $110 million exploit of Solana (SOL)-based decentralized finance (DeFi) trading platform Mango Markets guilty in the first-ever cryptocurrency market manipulation case in the US.

In a statement, the Department of Justice says that Avraham Eisenberg was convicted of commodities fraud, commodities market manipulation and wire fraud in connection with the trading scheme that left Mango Markets insolvent and users unable to access their funds.

On October 11th, 2022, Mango Markets claimed that an attacker artificially inflated the price of Mango (MNGO) and then borrowed large amounts of crypto assets from the platform using the unrealized profit from his long position in the utility token as collateral.

A week later, Eisenberg, who describes himself as a “digital art dealer,” went public as the brains behind the exploit. Still, the 28-year-old said he viewed the scheme as a legal trading strategy and blamed the protocol’s developers for failing to anticipate the event.

Eisenberg was arrested in Puerto Rico on December 26th, 2022 after he was charged for his actions. He was convicted on April 18th following a 10-day jury trial.

Says Principal Deputy Assistant Attorney General Nicole M. Argentieri,

“Manipulative trading puts our financial markets and investors at risk.  This prosecution — the first involving the manipulation of cryptocurrency through open-market trades — demonstrates the Criminal Division’s commitment to protecting U.S. financial markets and holding wrongdoers accountable, no matter what mechanism they use to commit manipulation and fraud.” 

The sentencing is set for July 29th.

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