Avraham Eisenberg accused of fraud and market manipulation

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Major takeaways Avraham Eisenberg was arrested in Puerto Rico yesterday. He is accused of commodity fraud and market manipulation. Eisenberg and his team were behind Mango Markets’ $100 million exploit. Share this article

Avi Eisenberg may have been too smart for his own good when he publicly revealed he was responsible for the Mango Markets exploit in October. Turns out the FBI was listening.

“A very profitable trading strategy”

The Department of Justice has taken action against another notorious crypto figure.

Avraham Eisenberg was reportedly apprehended yesterday by law enforcement in Puerto Rico for his role in the Mango Markets exploit that made him famous on Crypto Twitter in October. The affidavit says Eisenberg faces one count of commodity fraud and one count of commodity manipulation.

Mango Markets is a decentralized perpetual exchange on Solana. On Oct. 11, Eisenberg and his trading partners took a large position in Mango perpetual futures, artificially inflating the price of the illiquid MNGO token from $0.3 to $0.91. They then used their large unrealized profits as collateral to borrow the protocol’s assets and drew more than $100 million from its cash.

The exploiters then submitted a proposal to Mango’s governance forum to return the majority of the funds (and thus return Mango’s depositors whole) in return for $47 million and a promise to drop any criminal investigation. Shortly after the proposal was passed, Eisenberg announced on Twitter that he was responsible for the exploit, saying he had “implemented a very profitable business strategy” the previous week.

Eisenberg’s open and cheeky attitude may not have done him any favors. The affidavit against him specifically mentions Eisenberg’s “highly profitable business strategy” tweet, along with several others that show Eisenberg was aware of laws prohibiting market manipulation.

So far, the case against Eisenberg is solely about the Mango Markets exploit; however, the trader is also believed by the crypto community to have run similar programs on Curve, Fortress DAO, and Solend. Further charges may be pending.

Disclaimer: At the time of writing this article, the author of this article owned BTC, ETH, and several other crypto assets.

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