Avraham ‘Avi’ Eisenberg was found guilty of fraud in connection with the $110 million hack of the digital asset marketplace Mango Markets, according to Bloomberg.
According to the news, a federal jury in New York convicted Eisenberg guilty of wire fraud, commodities fraud, and commodities manipulation in connection with the scheme.
The trial for Eisenberg started on April 9 and went on for a little over a week. In December 2022, Eisenberg was taken into custody in Puerto Rico. He was accused by prosecutors of commodities fraud, market manipulation, and wire fraud with the Mango Markets decentralized cryptocurrency exchange hack.
Mango Markets was exploited in October 2022 following an artificially inflated price for MANGO, the platform’s native token. The policy was then abused by a borrower who received money that they were unable or unwilling to repay, leaving Mango Markets in the red.
The exploit entailed depositing $5 million worth of the stablecoin into Mango Markets, initiating an unusually long position that surged MANGO’s price by 1,000%. The exploiter then borrowed additional tokens, accumulating a significant debt position before absconding with the funds.
A few days after the incident, Eisenberg accepted responsibility and explained that his activities were a part of a legitimate, “highly profitable” trading plan that made advantage of Mango Markets as intended.
Later, Eisenberg gave Mango Markets back $67 million in cash, and the community behind the protocol permitted him to retain $47 million through a governance vote. Mango Markets lost approximately $116 million as a result of the scam.
In court, Eisenberg’s defense argued that his acts were a legitimate “winning” trading strategy. On the other hand, prosecutors referred to it as brazen fraud, according to reports from Inner City Press.
During Eisenberg’s trial, a UK customer testified they lost $124,000 and couldn’t withdraw funds. Eisenberg’s lawyer asked if Mango Markets questioned if the funds were stolen.
The witness stated, “That’s not how DAOs work,” according to Inner City Press. They said, “There’s no one to speak to.” The witness explained that DAOs don’t operate that way. Documents revealed Eisenberg searched for terms like “market manipulation criminal” and “FBI surveillance.”
Also Read: Eisenberg’s Trial Over $116M Mango Markets Exploit Begins
