Mango Markets Exploiter Avraham Avi Eisenberg has been convicted of fraud and manipulation charges related to the Mango Markets exploit by a federal court in Manhattan.
Mango Markets fell victim to a hack in October 2022 after the price of the platform’s native MNGO token was manipulated, leading to the loss of $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 also fled to Israel from Puerto Rico. However, the Mango Markets DAO rejected the proposal. Following his return to Puerto Rico, Eisenberg was apprehended by US authorities and has been in custody since, with the judge calling him a flight risk ahead of his impending trial.
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.
This, according to the jury, constituted fraudulent behavior. As a result, the jury found Eisenberg guilty of all charges, with the crypto trader now facing a prison sentence of up to 20 years. However, the sentencing is yet to be determined. Eisenberg himself did not testify during the trial but played a fairly active role in his defense, taking notes and discussing the questions with his attorneys. Following the conviction, the MNGO token registered a considerable surge, rising by over 11% over the past 24 hours.
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.
