The US Securities and Exchange Commission (SEC) arrested Avram Eisenberg On January 20, 2023, for attacking Mango Market by manipulating the platform’s native tokens and siphoning off $116 million in crypto assets.
SEC highlighted that the MNGO token is offered and sold as a security.
As per the SEC, Avraham Eisenberg is a 27-year-old DeFi trader and a US native currently facing criminal and civil charges by the Department of Justice(DOJ) and the Commodities Futures Trading Commission(CFTC) (separately).
The CFTC registered a case under civil charges against the DeFi trader on January 9, 2023, and was later arrested and detained in Puerto Rico.
The securities authorities elaborated that starting October 11, 2022, While residing in Puerto Rico, “Eisenberg engaged in a scheme to steal approximately $116 million worth of crypto assets from the Mango Markets platform.”
Authorities said that he reportedly “ used an account that he controlled on Mango Market to sell a large amount of perpetual futures for MNGO tokens and used a different account to buy back those same perpetual futures.”
Additionally, Eisenberg allegedly purchased many sparsely traded MNGO tokens to artificially inflate the token’s price relative to USD Coin (USDC), the SEC continued, adding that MNGO was not traded on common markets. Perpetual futures subsequently increased in value.
“Eisenberg used the increased value of his MNGO perpetual futures position to borrow and withdraw approximately $116 million worth of various crypto assets from Mango Markets, effectively draining all available assets from the Mango Markets platform,” the SEC said in its filing.
The complaint dated January 20, 2023 states, “After withdrawing the $116 million in crypto assets, Eisenberg stopped manipulating the price of the MNGO token, which led to significant declines in the prices of MNGO and MNGO perpetual futures contracts.”
“From the peak of Eisenberg’s manipulation of the MNGO token to the date of this filing, the price dropped by approximately 90% in regular market trading, the volume plummeted by approximately 80%, and the MNGO token became more illiquid, thereby harming investors,” the financial watchdog added.
In 2022, over $3 billion from crypto was stolen via cyber criminal activities.
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Source: https://www.thecoinrepublic.com/2023/01/23/us-authorities-detain-mango-market-attacker/