U.S. Prosecutors have filed criminal charges against Avraham Eisenberg, the crypto investor accused of trying to steal approximately US$110 million in October by rigging the Mango Markets cryptocurrency exchange.
Avraham Eisenberg is alleged of manipulating the price of Mango perpetual swaps, which are futures that allow traders to keep positions open. According to a criminal complaint unsealed Tuesday, he only needed 20 minutes to increase the price of the swaps by 1,300%.
According to the complaint, Eisenberg used his swaps, which had increased in value, to borrow and then withdraw approximately $110 million in various cryptocurrencies obtained from other investors’ deposits on the exchange.
According to the deposition, the platform became “insolvent” as a result, citing Eisenberg’s own Twitter account.
I believe all of our actions were legal open market actions, using the protocol as designed, even if the development team did not fully anticipate all the consequences of setting parameters the way they are.
Following the trade, Eisenberg negotiated with Mango Markets and agreed to return $67 million to the DAO that governs the company.
All mango depositors will be made whole,” with token holders who vote for the settlement agreeing not to “pursue any criminal investigations or freezing of funds once the tokens are sent back, a community post said at the time.
According to a second filing signed by Assistant U.S. Attorney Thomas Burnett, Eisenberg was arrested Monday night in Puerto Rico.
Shortly after the incident in mid-October, the self-described game theorist admitted his role in draining Mango Markets’ treasury, and he may now be the first U.S. resident to face charges for his role in manipulating a decentralised finance (DeFi) trading platform.
According to the filing, Eisenberg faces charges of commodities fraud and commodities manipulation. Penalties for the charges could range from fines to prison time.
The Mango exploiter’s method has been linked to some of the other high-profile attacks. Harvest Finance lost $34 million in 2020, while Beanstalk was hit for $182 million in April. A $9 million exploit was discovered in October on the decentralised credit platform Moola Market.