- Crypto Avraham Eisenberg has been arrested for his Mango Markets hack
- Eisenberg took $110 million worth of tokens from the decentralized exchange in October but said he had just gamed the system
- The FBI arrested him on December 26 and charged him with market manipulation and fraud
Crypto trader Avraham Eisenberg has been arrested in Puerto Rico and charged with market manipulation and fraud for his involvement in the theft of $110 million worth of various cryptocurrencies from decentralized exchange Mango Markets. The U.S. Justice Department filed a complaint against Eisenberg, accusing him of manipulating the value of Mango Markets’ native token, MNGO, in order to artificially inflate its price and secure “massive loans” against the inflated collateral. Eisenberg was arrested by the FBI on December 26, having previously admitted to the act that he said at the time was legal.
Eisenberg Said Complaints Were Just Jealousy
Mango Markets was exploited on October 11, with the exchange entering into negotiations with Eisenberg for the return of the stolen funds. By October 15, Mango Markets confirmed that $67 million worth of crypto assets had been returned, while Eisenberg tried to use the MNGO tokens stolen to manipulate a DAO vote in his favor.
In late October, Heisenberg told Laura Shin on the Unchained podcast that he had done nothing wrong, simply playing the protocol at its own game and that his actions were always “gonna attract some jealousy and some hate”. However, the FBI disagrees, with its recent complaint stating that the actions by Eisenberg constituted both fraud and market manipulation, as he “willfully and knowingly” engaged in a scheme involving the “intentional and artificial manipulation” of the price of perpetual futures on Mango Markets.
Aave Attack Failed
Eisenberg fled to Israel after the exploit, which the FBI believes may have been an attempt to avoid arrest and an acknowledgement that he had broken the law. FBI special agent Brandon Racz said in the December 23 complaint that, “Based on the timing of the flight, the travel appears to have been an effort to avoid apprehension by law enforcement in the immediate aftermath of the Market Manipulation Scheme.”
In November, Eisenberg attempted a similar attack on decentralized finance protocol Aave, but the plan failed due to a rise in the price of the targeted asset.