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Mango Markets Alleged Manipulator To Stand Trial This Week For $110 Million Theft, Used MNGO For Fraud

Julia Smith
Last updated: | 2 min read
Mango Markets, MNGO fraud, Avraham Eisenberg
Manhattan federal court with cryptocurrencies surrounding it.

The long-awaited trial of alleged Mango Markets crypto criminal Avraham Eisenberg got underway as jury selection began in Manhattan federal court Monday. Eisenberg is accused of stealing an estimated $110 million out of the crypto exchange Mango Markets by utilizing their cryptocurrency MNGO for fraud.

Originally arrested in December 2022, Eisenberg is facing one count each of commodities fraud, commodities manipulation, and wire fraud related to the cryptocurrency scheme.

Trial Of Mango Markets Manipulator Begins

Prosecutors allege Eisenberg sold off a large number of Mango Markets’ signature cryptocurrency, MNGO, to himself before making “a series of large purchases” with “the objective of artificially increasing the price of MNGO relative to USDC and, in turn, the price of MNGO Perpetuals on Mango Markets.”

“Eisenberg’s manipulative trading caused the price of MNGO Perpetuals on Mango Markets to rise approximately 1300% in a period of approximately 20 minutes,” a press release from the U.S. Attorney’s Office for the Southern District of New York reads.

From there, the alleged fraudster was able to borrow and withdraw over $110 million from the exchange, all of which came from other customers eventually causing Mango Markets to collapse.

Avraham Eisenberg Claims Innocence After Seemingly Using MNGO For Fraud

Despite the criminal charges, Eisenberg claims his supposed crypto scheme was not outside the law, going so far as to call it a “highly profitable trading strategy.”

“I believe all of our actions were legal open market actions, using the protocol as designed, even if the development team did not fully anticipate all the consequences of setting parameters the way they are,” he wrote in a statement on X in 2019.

Following Mango Markets’ insolvency, Eisenberg said he “helped negotiate a settlement agreement” in hopes of making “all users whole as soon as possible as well as recapitalizing the exchange.”

Cracking Down On Crypto Crime

Eisenberg’s trial comes at a major moment for crypto policy and regulation following the stringent sentencing of FTX founder Sam Bankman-Fried.

Like Bankman-Fried, Eisenberg faces an uphill legal battle as less than 1% of federal defendants are tried and acquitted.

The Department of Justice (DOJ) has taken a proactive approach to addressing cryptocurrency-related issues. Since then, it has tried a number of high-profile cryptocurrency-related cases, including Bankman-Fried.

“Exploiting decentralized finance platforms is the new frontier of old school financial crimes in which criminals abuse emerging technologies for their own personal gain,” Assistant Attorney General Kenneth A. Polite, Jr. said. “With this prosecution, the Criminal Division is sending the message that no matter the mechanism used to commit market manipulation and fraud, we will work to hold those responsible to account.”

If convicted, Eisenberg faces a maximum penalty of forty years in prison.