Infamous crypto trader Avraham Eisenberg, accused of a $110M exploit of Mango Markets has been arrested in Puerto Rico.
According to a filing from the United States Attorney Southern District of New York (SDNY), Eisenberg was arrested on December 26 in Puerto Rico. Eisenberg might now be the first US resident to be charged for the manipulation of a DeFi trading platform.
In October, Avraham Eisenberg took part in a scheme to steal almost $110 million by artificially inflating the price of MNGO Perpetuals on Mango Markets.
Eisenberg utilized a Mango Markets account under his control to sell a sizable quantity of perpetuals to MNGO and used another Mango Markets account to buy the identical perpetuals.
The price of MNGO relative to USDC was then artificially raised by Eisenberg through a series of significant MNGO purchases, which increased the cost of MNGO perpetuals on Mango Markets. The intended result of that purchase was achieved when the price of MNGO Perpetuals on Mango increased.
That purchase had the expected outcome, as it led to a sharp rise in the price of MNGO Perpetuals on Mango Markets over the course of about 20 minutes.
The price of MNGO Perpetuals increased by nearly 1300 percent during that period of time from roughly 0.0382 USDC to approximately 0.54 USDC.
As a result of the market manipulation scheme carried out by Eisenberg, the price of MNGO Perpetuals on Mango Markets increased, increasing the value of the MNGO Perpetuals that Eisenberg had purchased as well.
The rise in the value of the MNGO Perpetuals Eisenberg had bought allowed Eisenberg to borrow and withdraw cryptocurrency from Mango Markets based on the worth of their assets on the platform.
Eisenberg was able to borrow $110 million worth of different cryptocurrencies from Mango Markets, which came from deposits made by other investors in the Mango Markets exchange, thanks to the value of the MNGO Perpetuals he had bought.
Eisenberg had no intention of paying back the borrowed money. As a result, Eisenberg then stopped manipulating the price of MNGO Perpetuals after borrowing and withdrawing nearly all of the cryptocurrency deposits on the Mango Markets platform.
As a result, the price of MNGO Perpetuals substantially decreased once Eisenberg stopped manipulating it. Other investors who had deposited on Mango Markets lost most or all of those investments as a result of Eisenberg’s withdrawals.
Eisenberg later admitted on his official Twitter account that he was “involved with a team that operated a highly profitable trading strategy.”
Eisenberg stated that he believes all of his team’s actions were legal open market actions, using the protocol as designed, even if the development team did not fully anticipate all the consequences of setting parameters the way they are.
Eisenberg later reached a settlement with Mango Markets and consented to pay back $67 million to the DAO that controls it. Following Eisenberg’s intrusion, Mango DAO intended to restore those cash to users who were affected.
FBI special agent Brandon Racz stated Eisenberg took a flight from the United States to Israel the day following the exploit. The travel appears to have been an attempt to escape being apprehended by law enforcement in the immediate wake of the Mango Markets exploit based on the time of the flight.
In connection with his exploitation of Mango Markets, the Federal Bureau of Investigation (FBI) charged Avraham Eisenberg with one count of commodities fraud and one count of commodities manipulation.
Also Read: Avraham Eisenberg’s borrowed 50M CRV Tokens Liquidated
