Mango Markets Files Lawsuit Against Avraham Eisenberg

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Mango Markets has sued Avraham Eisenberg, the individual behind the attack on the Solana-based DeFi protocol. 

Mango Markets has filed for $47 million in damages and marks the 4th lawsuit to hit Eisenberg in relation to the attack on the DeFi protocol. 

Trouble Mounts For Eisenberg 

The troubles seem to keep increasing for Mango Markets attacker Avraham Eisenberg after he was sued by Mango Markets for $47 million. Eisenberg had crippled the Mango Markets protocol in October 2022, stealing around $110 million in cryptocurrencies from the protocol. The court filing was submitted on the 25th of January at the United States District Court for the Southern District of New York. The filing states that Eisenberg exploited the platform for millions of dollars worth of crypto assets in October 2022 and demanded $47 million in damages plus interest. 

The filing also asked the judge to rescind a previous agreement between Mango Market’s decentralized autonomous organization (DAO) and Eisenberg, asking for it to be declared “invalid and unenforceable.” Mango Markets had offered Eisenberg and his team $47 million as a bug bounty on the condition that he return $67 million worth of stolen assets, which he did. However, now the protocol is looking to reclaim the remainder of the stolen assets in damages, alleging that Eisenberg was not engaging in lawful bargaining. 

“[Eisenberg] forced Mango DAO to enter into an unenforceable settlement agreement—under duress—purporting to release depositors’ claims against him and precluding them from pursuing a criminal investigation.”

Charges Against Eisenberg

On his part, Eisenberg owned up to the Mango Markets exploit but described it as a “highly profitable trading strategy” rather than a straight-up exploit. Eisenberg managed to drain nearly $117 million from Mango Markets by successfully manipulating the price of the protocol’s native MNGO token. Eisenberg was eventually arrested by the FBI in Puerto Rico on the 27th of December and was charged with commodities fraud and commodities manipulation. 

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On the 9th of January, the Commodities Futures Trading Commission (CFTC) charged Eisenberg with two counts of market manipulation, further adding to the FBI’s charges. On the 20th of January, Eisenberg was dealt another blow, as the United States Securities and Exchange Commission (SEC) charged him with violations in relation to anti-fraud and market manipulation provisions of United States securities laws. 

Mango Markets has called Eisenberg a “notorious online personality” who has a history of attacking multiple platforms and manipulating markets. Eisenberg has attempted to exploit several protocols, including DeFi protocol Aave. 

A Significant Hit For DeFi 

Mango Markets was one of the many DeFi platforms targeted during the notorious month of Hacktober, now attributed as the worst month when it comes to DeFi hacks in the crypto space, with the ecosystem losing over $3 billion worth of digital assets. Hacktober marked the end of an extremely turbulent year for the DeFi space, coupled with uncertainty and price drops in the broader market. Along with Mango Markets, several other protocols were impacted, including Wormhole, Harmony, Ronin, Sovryn, BitKeep, Olympus DAO, and the Ethereum Alarm Clock Service. 

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.