CFTC Accuses Mango Markets Hackers With Fraud

On Monday, the Commodity Futures Trading Commission charged Avraham Eisenberg with manipulating the Mango Markets decentralised exchange and stealing over $110 million in digital assets. The announcement came only a week after the DOJ charged Eisenberg with the October 11, 2022, attack.

Mango Markets is a Solana-based decentralised exchange (DEX) run by a DAO comprised of MNGO holders that allows investors to lend, borrow, swap, and employ leverage to trade crypto.

Mango Markets tweeted on October 11 that a hacker had modified the platform’s pricing oracle, draining the Solana exchange of about $110 million.

Eisenberg was arrested in December 2022 by the US Department of Justice for his role in the Mango Markets breach, which he acknowledged on Twitter. He called the move “a tremendously rewarding trading technique.”

Eisenberg has now been charged by the CFTC with fraud, market manipulation, and violation of the Commodity Exchange Act. It claims it wants monetary penalties, a prohibition on trading digital asset commodities, and money restoration.

Eisenberg, according to the lawsuit, opened two anonymous accounts at Mango Markets immediately before the October attack and financed each with $5 million in USDC. Eisenberg used leverage to create a $19 million long position in one account, consisting of over 400 million MNGO/USDC Swaps at about $0.04. He then opened a $19 million short position in the second account, consisting of the same amount of MNGO/USDC Swaps.

Following the breach, Mango DAO offered the Mango Market attacker a $47 million bug reward and the promise not to file charges if they returned $67 million in tokens. Although Eisenberg officially agreed to the conditions of the agreement, it is unknown if the tokens were returned.

While the Mango Market DAO and community are understanding, the United States and law enforcement authorities are not. The CFTC’s lawyers request a trial date for Eisenberg and any other people involved in the Margo Markets breach described in the document.

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