Arrests in crypto industry continue
2022.12.28 00:32
Arrests in crypto industry continue
Budrigannews.com – In Puerto Rico, a crypto trader responsible for the $110 million Mango Markets scam has been arrested and charged with market manipulation and fraud.
The Federal Bureau of Investigation (FBI) charged Avraham Eisenberg with one count of commodities fraud and one count of commodities manipulation in connection with his use of Mango Markets, according to a sealed complaint that was filed with the Southern District of New York and made public on December 27.
Eisenberg exploited Mango Markets on October 11 by artificially inflating the price of MNGO, the platform’s native token, in relation to USD Coin (USDC).
After that, Eisenberg and his team made “massive loans” against Mango’s overinflated collateral, which cost Mango’s treasury approximately $110 million in various cryptocurrencies.
On October 12, one day later, Mango began negotiating with Eisenberg regarding the return of the funds.
On October 15, a few days later, Mango Markets made the announcement that various crypto assets worth $67 million had been returned.
After that, Eisenberg admitted in public that he had taken advantage of the cryptocurrency exchange. He said that he was part of a team that “operated a highly profitable trading strategy” and that he thought all of his actions were “legal open market actions.”
Since Eisenberg “willfully and knowingly” participated in a scheme involving the “intentional and artificial manipulation” of the price of perpetual futures on Mango Markets, the FBI stated in its most recent complaint that his actions constitute both fraud and market manipulation.
In the end, he was able to withdraw $110 million worth of cryptocurrencies, the majority of which came from the deposits of other investors in Mango Markets.
In the Dec. 23 complaint, FBI special agent Brandon Racz explained, “Due to [Eisenberg’s] withdrawals, other investors with deposits on Mango Markets lost much, or all of those deposits.”
According to Racz, Eisenberg may have been aware that his actions were illegal as well because he flew from the United States to Israel the day after the Mango Markets exploit.
He stated, “The travel appears to have been an effort to avoid apprehension by law enforcement in the immediate aftermath of the Market Manipulation Scheme” based on the timing of the flight.
More U.S. Department of Justice Searches for Missing FTX Money
According to a report filed by the United States Attorney for the Southern District of New York, Eisenberg was taken into custody on December 26 in Puerto Rico.
Eisenberg tried his luck once more in November, this time on Aave, a decentralized finance (DeFi) protocol. He borrowed 40 million CRV tokens from Aave and bet on a price drop by performing a series of sophisticated short sales.
Nevertheless, the strategy failed in the end because the price actually increased during the attack, resulting in losses due to the substantial short position.
