A 27-year-old man living in Puerto Rico is facing criminal charges after allegedly defrauding crypto exchange Mango Markets and its customers of $110 million in cryptocurrency. Avraham Eisenberg has been charged with commodities fraud, commodities manipulation, and wire fraud following a filing from Mango Markets seeking $47 million in damages plus interest.
Mango Markets, operated by the Mango Decentralized Autonomous Organization (DAO), offers a crypto token called MNGO for investors to trade. Eisenberg is accused of manipulating the price of MNGO perpetuals contracts, a type of futures contract in the crypto market, by selling large amounts to himself. This reportedly caused a 1300% increase in the price of the contracts in under an hour.
Taking advantage of the inflated value of his MNGO perpetual futures position, Eisenberg allegedly borrowed and withdrew around $110 million in various crypto assets from Mango Markets, depleting the platform’s assets. US attorney Damian Williams for the Southern District of New York stated, “As alleged, Avraham Eisenberg manipulated the Mango Markets cryptocurrency exchange to obtain over $100 million in illicit profits for himself, leaving others at a loss.”
In addition to the criminal charges, Eisenberg is also facing a complaint from the Securities and Exchange Commission (SEC) for violating securities laws. The SEC is seeking civil penalties, permanent injunctive relief, conduct-based injunction, and disgorgement with prejudgment interest.
Market manipulation, whether in traditional or cryptocurrency markets, is illegal, and authorities are committed to prosecuting such schemes. Eisenberg’s alleged actions have highlighted the risks and vulnerabilities in the crypto market, emphasizing the importance of regulatory oversight and investor protection measures.