CFTC Charges Mango Markets Exploiter Avraham Eisenberg for Market Manipulations

Following the erstwhile arrest of Mango Markets exploiter Avraham Eisenberg, the United States Commodity Futures Trading Commission (CFTC) has charged the exploiter with two counts of market manipulation on Jan. 9.

Today @CFTCjohnson released a statement regarding the CFTC action against a market manipulation scheme in the digital assets markets. https://t.co/oArsnrc3ME

— CFTC (@CFTC) January 10, 2023

While Eisenberg maintained that his actions on the decentralized finance (DeFi) platform was legal and within the ambit of the law, CFTC was not convinced with his premises and has subsequently charged him to court.

Recall that Eisenberg was reportedly arrested on Dec. 27 in Puerto Rico by the Federal Bureau of Investigation (FBI).

However, the CFTC argued in the suit that the self-acclaimed digital artist Avraham Eisenberg engaged in a manipulative and deceptive scheme by artificially inflating the price of Mango Markets through shady swaps.

The manipulation led to the extortion of more than $100 million from the DeFi platform. It was gathered that Eisenberg purchased over 400 million MNGO-USDC and thereafter swapped it on Mango Markets with a position size of roughly $19 million.

CFTC further stressed that his repeated action made Mango Markets to become illiquid, which was portrayed as a “wash transaction.”

Highs and Lows of Eisenberg

Having successfully manipulated and extorted Mango Markets DeFi platform, Einsenberg reeled out conditions that the platform must promise to pay back bad debt using USDC available in its treasury before he could refund some stolen parts.

In the same vein, he urged the platform not to take any legal action against him once he processes refund but it appears this is not holding sway following the ongoing prosecution against him.

Meanwhile, Eisenberg finally reached an agreement with Mango Markets, in which the platform confirmed that $67 million in various crypto assets have been returned to the DAO by the attacker.

Similarly, $47 million was approved by more than 98% of the Mango Mangos community as bug bounty for Eisenberg.

The CFTC and all involved prosecuting agencies must act diligently and objectively on this case in order to deter many other individuals with similar intent.