The Commodity Futures Trading Commission (CFTC) and other regulatory bodies have joined the Securities and Exchange Commission (SEC) of the United States in filing charges against a crypto user accused of organizing a fraudulent scheme that leads to millions of dollars in losses in Mango Markets, a DeFi protocol.
SEC: Avraham “Avi” Eisenberg took advantage of the platform
The SEC stated on Jan. 20 that Avraham Eisenberg defrauded Mango Markets of approximately $116m in crypto by manipulating the MNGO governance token. Eisenberg is also accused of draining the assets from Mango Markets after making several big MNGO purchases to artificially increase the token’s price to USD Coin USDC tickers by $1.00.
Avraham-27, is also accused of violating the securities laws’ anti-fraud and market manipulation clauses by the SEC, with cooperation from the FBI, the CFTC, and the U.S. Attorney’s Office for the Southern District of New York.
According to the banking regulator, it would pursue “civil penalties, disgorgement with prejudgment interest, a conduct-based injunction, and permanent injunctive relief.”
In October, a significant Mango Markets exploit, allegedly carried out by Eisenberg, resulted in the withdrawal of almost $50m USDC, $27m Marinade Staked SOL (mSOL), $24m in SOL, and $15m in MNGO.
Eisenberg publicly stated that his activities as part of a “very profitable trading strategy” had been legal. Mango Markets later revealed that he had paid around $67 million.
Authorities in Puerto Rico detained Eisenberg in 2022
In December, police in Puerto Rico detained Eisenberg. In an FBI’s complaint, the perpetrator was accused of “intentional and artificial manipulation” of the price of never-ending futures on the crypto platform “willfully and knowingly.”
On Jan. 9, the CFTC filed a lawsuit, charging Eisenberg with market manipulation.
Later, a magistrate judge ordered Eisenberg’s imprisonment until his trial during a detention hearing in January, as this was the only option to ensure his appearance was guaranteed. Since his detention in December, the Mango Markets fraudster has not made any comments.