Avraham Eisenberg convicted in $110m Mango Markets exploit

Avraham ‘Avi’ Eisenberg, a figure in the digital finance sector, was found guilty in relation to a major security breach at Mango Markets, where over $110 million was compromised.

In December 2022, Eisenberg was arrested in Puerto Rico, facing charges of commodities fraud, market manipulation, and wire fraud linked to the Mango Markets exploit. The incident occurred in October 2022 when Eisenberg injected $5 million of USDC stablecoin into Mango Markets.

According to court findings, Eisenberg manipulated the price of MNGO, the platform’s token, causing it to surge approximately 1,000% in one hour. The artificial increase allowed him to borrow and withdraw additional tokens, creating a significant negative debt position for the platform.

A few days after the exploit, Eisenberg claimed that his actions were part of a legal, highly profitable trading strategy, utilizing the platform’s features as intended. He later returned $67 million to Mango Markets, retaining $47 million as per a community governance vote.

The trial, which started on April 9, spanned just over a week. In court, his defense maintained that Eisenberg employed a legal trading strategy, however, prosecutors branded his actions as fraudulent, according to Bloomberg.

During the trial, a U.K. customer testified about being unable to withdraw funds, losing $124,000.

“That’s not how DAOs work. There’s no one to speak to,” the customer stated, reflecting the decentralized core of such platforms.

Bloomberg also revealed that jurors saw evidence of Eisenberg searching online for market manipulation criminal and FBI surveillance terms. Mango Markets ultimately suffered a loss of around $116 million due to the exploit.

The price of MNGO is currently up 14% in the past 24 hours and sits at $0.0289, according to CoinGecko.