Crypto trader arrested over fraud and market manipulation charges
The cryptocurrency trader, Avraham Eisenberg, has been arrested in Puerto Rico for fraud and market manipulation after he managed to exploit over 110 million USD on Mango Markets.
The Southern District of New York made public on 27 December 2022 that the FBI had targeted Eisenberg with multiple charges regarding his exploit of Mango Markets. He publicly stated in a tweet that he was operating in a team with a “highly profitable trading strategy,” believing that his actions were legal.
Eisenberg's actions commenced on 11 October 2022 when he manipulated the value of $MNGO, the native token of Mango Markets, by inflating its price against $USDC. On 12 October 2022, the platform got in touch with the trader to request the return of the funds. Days later, Eisenberg proposed a refund, but only if he could keep 70 million USD’s worth of crypto without criminal prosecution.
The proposal was communicated on the Mango DAO, where $MNGO holders have the power to make decisions. 96% were in favor of the deal, resulting in Mango Market paying a 47 million USD bug bounty to Eisenberg and not pursuing criminal charges against him if he returned 67 million USD.
In November, Eisenberg and his team tried to repeat their actions through DeFi protocol Aave, but this time, the plan was not successful. This was to be his last attempt at a hack before he was arrested in Puerto Rico on 26 December 2022. The now-notorious trader is facing up to 25 years’ imprisonment.
Sources: cointelegraph.com, www.bankinfosecurity.com, es.cointelegraph.com
analyst opinion
Diego Kebork
The Southern District of New York made public on 27 December 2022 that the FBI had targeted Eisenberg with multiple charges regarding his exploit of Mango Markets. He publicly stated in a tweet that he was operating in a team with a “highly profitable trading strategy,” believing that his actions were legal.
Eisenberg's actions commenced on 11 October 2022 when he manipulated the value of $MNGO, the native token of Mango Markets, by inflating its price against $USDC. On 12 October 2022, the platform got in touch with the trader to request the return of the funds. Days later, Eisenberg proposed a refund, but only if he could keep 70 million USD’s worth of crypto without criminal prosecution.
The proposal was communicated on the Mango DAO, where $MNGO holders have the power to make decisions. 96% were in favor of the deal, resulting in Mango Market paying a 47 million USD bug bounty to Eisenberg and not pursuing criminal charges against him if he returned 67 million USD.
In November, Eisenberg and his team tried to repeat their actions through DeFi protocol Aave, but this time, the plan was not successful. This was to be his last attempt at a hack before he was arrested in Puerto Rico on 26 December 2022. The now-notorious trader is facing up to 25 years’ imprisonment.
Sources: cointelegraph.com, www.bankinfosecurity.com, es.cointelegraph.com
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