Coinspeaker
NY Federal Court to Commerce Trial against Mango Markets Exploiter in $116M Theft Case
A court in New York is gearing up to commence trial against Mango Markets exploiter Avraham Eisenberg for stealing over $116 million from the Solana-based decentralized finance (DeFi) protocol in October 2022.
The alleged criminal was indicted by the US Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) last year for fraud related to market manipulation, wire fraud, and securities law violations concerning the exploitation of Mango Markets.
Authorities claim Eisenberg artificially manipulated the price of certain perpetual futures contracts on the Solana-based margin trading and lending platform.
The Genesis: How It Began
The genesis of the case dates back to October 2022 when the Mango Markets faced a massive exploit that resulted in the loss of around $117 million belonging to user funds on the platform.
The Solana-based margin trading and lending platform acknowledged the exploit on X (formerly Twitter) and attributed it to price manipulation of its native token, MNGO. The hackers manipulated the price of MNGO collateral using sophisticated software to drain the platform of substantial loans. This tool allowed the hacker to take out a $116 million loan, leaving Mango’s treasury with a deficit of $116.7 million.
Blockchain security firms also confirmed the theory, noting that the hacker initiated a large Mango perpetual futures position before purchasing $4 million worth of MNGO across three different exchanges, which caused the oracle-reported price of MNGO to surge by 2,300 percent within a few minutes.
Shortly after the exploit, Eisenberg admitted on X that he was among the team that attacked the platform for gains.
He also confirmed that the team used a high-profile trading strategy to rig the system. However, he claimed that the strategy was legal, but the government claimed it was a theft, leading to the events of his arrest.
Eisenberg’s Trial Set to Commence This Week
Eisenberg’s trial is scheduled to commence this week, although the exact date remains undisclosed. Originally slated for December 4, 2023, the trial was postponed until this year at the request of Eisenberg’s lawyers due to the case’s complexity. The trial is expected to last for two weeks, with a 15-member jury in place to hear the case.
Meanwhile, Eisenberg’s case is under intense scrutiny due to its involvement with a substantial sum of money and a prominent DeFi platform. The trial’s outcome could establish a precedent for handling future cases related to fraud and manipulation in the DeFi space. Moreover, the court’s ruling will play a crucial role in shaping security practices in the digital asset sector.
NY Federal Court to Commerce Trial against Mango Markets Exploiter in $116M Theft Case
