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Avraham Eisenberg, a crypto trader, is going to trial on December 4, for allegedly taking part in a $100 million scam. Eisenberg will be tried on charges of manipulation and fraud at the cryptocurrency exchange. Eisenberg could face significant legal consequences if he’s found guilty.
CFTC Files Charges Against Individual Behind Mango Markets Scam
On October 11, the cryptocurrency platform was hacked. The company lost $110 million. The Commodity Futures Trading Commission (CFTC) and SEC are investigating.
The CFTC accuses Eisenberg of fraud, market manipulation, and breaking the Commodity Exchange Act. Eisenberg faces penalties, a ban on trading virtual assets, and money return.
Using deceptive tactics, Eisenberg allegedly artificially boosted the value of his swap contract holdings at Mango Markets. A substantial amount of digital assets should be borrowed without repayment.
The Rise and Fall of Mango Markets: Scam, Arrest, and Legal Battle
On the Solana blockchain, Mango Markets operates as a decentralized exchange (DEX) governed by MNGO token holders through a Decentralized Autonomous Organization (DAO). This platform lets you quickly and conveniently lend, borrow, swap, and leverage trade cryptocurrencies.
The MNGO token holders are given voting rights to determine how the exchange is operated, and the DAO ensures that all transactions are secure and immutable.
The platform also utilizes the Solana blockchain’s high throughput and low latency to provide users with fast and secure transactions
Eisenberg was arrested by the U.S Department of Justice on December 27, 2022, for his investment in the Mango Markets fraud, which he confessed on Twitter and described as “a highly profitable trading strategy.”
A few days before the hack, Eisenberg allegedly opened two anonymous accounts on Mango Markets. Each account got $5 million in USDC.
Eisenberg set up a long position worth $19 million using one of the accounts. The deal involved buying over 400M swaps of MNGO/USDC at about $0.04 each.
On the second account, Eisenberg created a short position of equal value and many MNGO/USDC swaps.
The CFTC says Eisenberg used this tactic to carry out a “wash” transaction, concealing his identity by setting up both accounts anonymously.
In response to the security breach, Mango DAO offered a reward of $47 million. They’d get immunity from legal action for returning tokens worth $67 million.
The person behind the scam, Eisenberg, publicly agreed to the terms. But it’s unclear if the tokens actually got back to Mango DAO.
The US legal system and law enforcement agencies tend to be less forgiving than Mango Market DAO.
It’s all about the upcoming trial of Avraham Eisenberg, who’s facing federal charges, including commodities manipulation, fraud, wire fraud, and commodities.
After pleading not guilty on January 9, 2023, Eisenberg now faces a significant trial on December 4, which could have a 20-year sentence. Eisenberg’s lawyer, John Smith, believes the jury will find him guilty because the evidence is weak. Smith wants the case moved to a different court. He’s still hoping for a good outcome.
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