Mango Market's Attacker Arrested in Puerto Rico
Self-doxxed trader behind the $110M Mango Market exploit Avraham Eisenberg is now in the custody of law enforcement agents. Eisenberg’s arrest came on allegations of commodities fraud alongside manipulation to cart off over $100M worth of crypto from the aforementioned platform.
Eisenberg Charged with Market Manipulation
Per a filing from the United States Attorney Southern District of New York (SDNY), the arrest took place in Puerto Rico. This was on Monday, December 26th. An unsealed criminal complaint on Tuesday alleged that Eisenberg raised the Mango Market exchange rate by 1,300%. He then reportedly borrowed and withdrew assets in under 20 minutes using the inflated swap rate.
Additionally, the complaint asserted that the crypto trader “willfully and knowingly” influenced the sale of a commodity. The commodities in question are future contracts on decentralized finance protocol Mango Markets. As stated earlier, Eisenberg is facing market manipulation charges, possible penalties include a fine or incarceration.
Notably, FBI special agent Brandon Racz signed an affidavit further implicating Eisenberg in the case. The document claims:
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[Eisenberg] engaged in a scheme involving the intentional and artificial manipulation of the price of perpetual futures contracts on a cryptocurrency exchange called Mango Markets, and other manipulative and deceptive devices and contrivances.”
The arrest marks the first time authorities have brought DeFi market manipulation charges against a US resident.
Further Details of the Mango Hack
Eisenberg’s case goes back to October when he was involved in a scheme to steal about $110 million from DeFi platform Mango Markets. The trader interfered with oracle prices to drive up the price of the protocol’s collateral. Through this, he was able to borrow from the treasury and use another Mango account under his control to begin counter-trading.
The exploit saw Mango Markets become insolvent and Mango users were cut off from their funds. Shortly after the hack, Eisenberg visited the Mango DAO governance forum with a proposal to revive the platform. He made a deal that netted him a $47M bug bounty but also saw him return $67M from the loot.
In spite of the refund, Mango Markets was unable to recover. Notably, the platform’s deal with Eisenberg ensured the team could not press charges.
Actions Above Board, Eisenberg Says Before Fleeing
In a tweet, later on, the New York resident unveiled himself, admitting his role in the exploit. Eisenberg shared a thread where he described it as a “highly profitable trading strategy.” He also revealed that there were others involved in the attack.
Per the post, his actions were entirely above board as he alongside his team had used the protocol as designed. Eisenberg accused the Mango team of failing to consider the “consequences of setting parameters the way they are.” Two weeks after the exploit, Eisenberg reiterated his beliefs with Laura Shin over an interview on the Unchained Podcast.
Notably, Racz hinted at the possibility that Eisenberg may have known he was subject to the law. Indeed, the trader exited the country, within a day of the exploit. The FBI agent stated that the Mango Markets exploiter quickly fled the U.S. in an attempt to evade capture.
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