CFTC Charges Mango Markets Exploiter With Market Manipulation

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The notorious Avraham Eisenberg, also known for masterminding the $117 million hack on Mango Markets, has been charged with market manipulation by the CFTC. 

CFTC Follows DOJ, Charges Eisenberg

On Monday, the United States Commodity Futures Trading Commission (CFTC) joined the U.S. Department of Justice in bringing charges of market manipulation against Avraham Eisenberg. The DOJ had arrested Eisenberg towards the end of 2022 on similar charges for his role in the Mango Markets hack that resulted in the loss of assets worth $117 million. 

The government body announced this news through a press release, which read, 

“The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the Southern District of New York, charging Avraham Eisenberg with a fraudulent and manipulative scheme to unlawfully obtain over $110 million in digital assets from a purported decentralized digital asset exchange.”

CFTC’s First Enforcement In Crypto

The lawsuit against Eisenberg alleges that he violated federal commodities law by employing a “deceptive device” to manipulate the price of the MNGO token. Over $100 million worth of crypto was siphoned away from the decentralized exchange after the trader used multiple accounts to buy, sell, and hedge the price of the token. Incidentally, this would be the CFTC’s first legal action involving digital asset trading on a decentralized platform and involving the ‘oracle manipulation’ scheme that Eisenberg employed. 

The Acting Director of Enforcement, Gretchen Lowe stated, 

“The CFTC will use all available enforcement tools to aggressively pursue fraud and manipulation regardless of the technology that is utilized. The CEA prohibits deception and swap manipulation, whether on a registered swap execution facility or on a decentralized blockchain-based trading platform.” 

CFTC Dismisses Eisenberg’s Claims Of Legality

Eisenberg had voluntarily admitted that he was responsible for the exploit and claimed that he and his team did nothing illegal. In fact, according to him, his actions were all part of a profitable trading strategy. He has even returned a part of the funds to the platform. However, it is clear that the DOJ did not share his viewpoint on the matter and arrested him roughly two months later on charges of market manipulation. 

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Now the CFTC, too, has taken a similar approach to the hack, claiming that Eisenberg had openly admitted to his scheme in a Discord server prior to the exploit as well as through his tweets. 

The CFTC said, 

“Contrary to his purported belief that his actions were legal, in fact, they constituted blatant manipulation of spot prices and swaps.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.