Crypto Investor Charged with Manipulating Mango Markets’ Token to Steal over $100M of Crypto Assets
On Thursday, February 2, 2023, the United States Attorney’s Office for the Southern District of New York, the Department of Justice Criminal Division, and the Federal Bureau of Investigation New York Field office announced the appearance of Avraham Eisenberg that day in the federal court of Southern District of New York in Manhattan.
Eisenberg’s appearance was in connection with an indictment charging him with orchestrating a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from crypto exchange called Mango Markets and its customers. Eisenberg was also charged with market manipulation and wire fraud in carrying out the scheme.
According to the United States Department of Justice press release, Mango Markets is a decentralized cryptocurrency exchange that allows investors to purchase and borrow cryptocurrencies and cryptocurrency-related financial products. Investors can also engage in spot trading in which an investor exchanges one cryptocurrency for another, at whatever the prevailing exchange rate for those two cryptocurrencies is at the time of the transaction. In addition, investors of Mango Markets are allowed to use their deposits and positions as collateral for borrowing and withdrawing cryptocurrency from the Mango Markets exchange.
The indictment was filed on January 9, 2023, by the United States Attorney’s Office, through Damian Williams, United States Attorney for the Southern District of New York, under 23 Crim 010, titled United States of America v. Avraham Eisenberg. The indictment charges Eisenberg with commodities fraud, market manipulation fraud, and wire fraud.
“Market manipulation is illegal in all of its forms, and this Office is committed to prosecuting such schemes wherever they occur – including in cryptocurrency markets.”, said Williams.
Kenneth A. Polite, Assistant Attorney General, said that the Justice Department’s Criminal Division will work to hold those responsible for market manipulation and fraud “no matter the mechanism used”. “Exploiting decentralized financial platforms is the new frontier of old school financial crimes in which criminals abuse technologies for their own personal gain.”, added Polite.
In a statement, FBI Assistant Director Michael J. Driscoll said that the FBI is dedicated to safeguarding the integrity of all financial markets and will ensure that any individual willing to exploit one be held responsible in the criminal justice system. Eisenberg’s case was assigned to United States District Judge Richard Berman.
If found guilty, Eisenberg will face a maximum prison term of 10 years each for commodities fraud and commodities manipulation, respectively. While the charge of wire fraud carries a maximum sentence of 20 years in prison.
Moreover, a Complaint against Eisenberg was also filed by Mango Labs, LLC under Case No. 23-cv-665 and was filed before the United States District Court for the Southern District of New York on January 25, 2023. Said Complaint alleges Eisenberg of conversion, fraudulent misrepresentation, and unjust enrichment and seeks a declaratory judgment to recover from harm caused by Eisenberg’s attack on Mango Markets.
Source: United States Department of Justice
