Mango Markets Exploiter Arrested
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An editor at Coincrop
28 Dec 2022 | 5 min read
n a shocking turn of events, the notorious Mango Markets Exploiter has been apprehended and officially charged with fraud and market manipulation.
In October, Avraham Eisenberg came forward to admit his involvement in the $114 million Mango Markets exploit. Consequently, the Justice Department quickly took action and apprehended him for his role in this crime.
Federal agents have apprehended Avraham Eisenberg in Puerto Rico for exploiting Mango Markets, a Solana-based DeFi platform, resulting in an October $114 million loss. Two counts of commodities fraud and manipulation were charged against him due to his involvement with the exploit.
Eisenberg Engaged in a Scheme to Defraud and Manipulate the Price of Perpetual Futures Contracts
On the count of commodities fraud, court documents state that in October 2022, Mr Eisenberg used and employed ‘a manipulative device, scheme, and artifice to defraud,’ made untrue and misleading statements and engaged in practices and courses of business which operated ‘as a fraud and deceit upon other persons.’
In relation to the second accusation of market manipulation, Eisenberg stands accused of engaging ‘in a scheme involving the intentional and artificial manipulation of the price of perpetual futures contracts on a cryptocurrency exchange called Mango Markets.’
In a mere two months, Avraham Eisenberg and his crew were able to utilize Mango Markets and score $114 million! Shockingly, they kept almost half of that sum ($47M) as their bug bounty. Charges have now been pressed against them in response to this heinous act.
By utilizing USDC, the scheme was set into motion which caused a dramatic five to tenfold surge in MNGO/USD price on multiple exchanges.
Following the price increment, both Switchboard and Pyth oracles altered their MNGO benchmark rate to an impressive $0.15, thus profiting from the MNGO-PERP position. As a result of these drastic changes, they were able to exploit this newfound advantage by borrowing and transferring BTC (sollet), USDT, SOL, mSOL and USDC from the Mango protocol itself!
Following the exploit, Eisenberg and his team discussed on the Mango DAO forum a possible solution to repay any leftover debts and drop all legal charges. This proposal would see some of their mSOL, SOL and MNGO returned in order to make users whole again.
Despite the initial proposal being denied by the community, an agreement was reached in which attackers would return $67 million of stolen tokens to pay off outstanding debt and keep a bounty of approximately $47 million. This second proposition then passed just as Eisenberg identified himself as the individual responsible for this malicious exploit.
MikeAn editor at Coincrop
Mike is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely putting his latest car project back together.
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