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New details of the Abraham Eisenberg case

2022.12.30 01:06

New details of the Abraham Eisenberg case
New details of the Abraham Eisenberg case

New details of the Abraham Eisenberg case

Budrigannews.com – On December 26, commodities fraud and manipulation charges related to the $110 million exploit of the decentralized Mango Markets exchange led to Avraham Eisenberg’s arrest in Puerto Rico. Eisenberg insisted that he had carried out “legal open market actions, using the protocol as designed,” claiming that he was the actor behind a “highly profitable trading strategy.” 

Predictably, Eisenberg’s arrest lit up crypto Twitter, with some observers paying special attention to the fact that charges of commodities fraud were being brought in a case involving a cryptocurrency:

“AVRAHAM EISENBERG, the defendant, willfully and knowingly, directly and indirectly, used and employed, and attempted to use and employ, in connection with a swap, a contract of sale of a commodity in interstate and foreign commerce.”

Eisenberg had taken out loans against his collateral after manipulating the MNGO coin’s price in relation to the USDC (USDC) stablecoin. Eisenberg was charged with commodities fraud as a result of this. Special agent Brandon Racz of the United States Federal Bureau of Investigation wrote in the charges against Eisenberg:

“I understand that virtual currencies, such as USDC, are ‘commodities’ under the Commodity Exchange Act.”

Although it cites the McDonnell case, which was prosecuted by the U.S. Commodities Futures Trading Commission (CFTC), as precedent, the agent’s understanding that stablecoins are commodities is only partially supported by government policy. Although it may have been a deliberate decision, the assertion that USDC is a commodity is not as controversial as the assertion that MNGO is the same.

The DOJ’s decision to use the Commodity Exchange Act (CEA) to prosecute the case appeared to be based on legal strategy. For a certain something, the CEA tends to cost control straightforwardly.

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Additionally, the perception that the CFTC takes a softer stance on crypto regulation than the SEC is debatable.

New details of the Abraham Eisenberg case

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