Avraham Eisenberg exploited Solana-based Mango Markets in October 2022. He was charged with the allegations two months after that, that is, in December 2022. Now, almost 18 months after being charged by the US District Court or the Southern District of New York, Eisenberg has been convicted for fraud and market manipulation. This comes after he attempted to use code is law as a defensive argument, as per reports.
It is estimated that his exploit cost the network almost $110 million. This is said to have happened after he took advantage of poorly constructed DeFi protocols. In an effort to provide Eisenberg with legal protection, his attorney claimed that his actions constituted a lawful and profitable trading strategy that capitalised on a design defect at Mango Markets.
The jurors were not convinced, and they concluded that a crime is a crime no matter if it happens on blockchain.
MNGO is one particular token in the middle of the conversation. The manipulation is believed to have led to a significant increase in its price. Eisenberg was using the perpetual token as collateral to borrow crypto worth approximately $110 million. He didn’t have any intention of repaying them, reports have claimed. Avraham said that it was rather a profitable trading strategy, even if the development team didn’t anticipate what could happen to their design.
In the end, Eisenberg managed to fuel the price for an upward trajectory.
It had been expected that the case would ultimately put an end to the decline of MNGO tokens; however, the situation has changed as the token’s value continues to fall. It was only recently that it rose by 1.59% to exchange hands at $0.02903. It has remained on a downward trend of 9.45% in the last 7 days. The 24-hour volume has dipped by 25.42%, and the market cap is up by 0.19% at the time of writing this article.
Eisenberg had reportedly fled to Israel and was found searching the Internet for criminal and regulatory enforcement of market manipulation and a list of Israel extraditions. Eisenberg now remains convicted of commodities market manipulation, commodities fraud, and wire fraud.
Eisenberg’s court case is one of the first such instances wherein the court has addressed code is a law principle of the industry. It is often believed that smart contracts are fairer than the rules that traditional organizations draft.
What could have initially triggered such a long legal battle is Eisenberg’s attempt to blackmail the governance of the Mango Markets protocol. He also purchases a Ukrainian women’s FTX account to conduct some trades associated with the exploit. In other words, he has been found guilty of blackmailing, using fake KYC, and saving child pornography on his cell phone.
This development has come at a time when the entire crypto market is in turmoil. The movement of tokens is largely poised for correction, yet some are showing bullish signs, leaving the community in splits.
Source: https://www.cryptonewsz.com/eisenberg-found-guilty-of-mango-markets-exploit/