{"id":23272,"date":"2023-06-16T00:00:56","date_gmt":"2023-06-16T04:00:56","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/trader-avraham-eisenberg-to-stand-trial-in-december-for-100-million-crypto-scam\/"},"modified":"2023-06-16T00:00:58","modified_gmt":"2023-06-16T04:00:58","slug":"trader-avraham-eisenberg-to-stand-trial-in-december-for-100-million-crypto-scam","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=23272","title":{"rendered":"Trader Avraham Eisenberg To Stand Trial in December for $100 Million Crypto Scam"},"content":{"rendered":"
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Avraham Eisenberg, a trader accused of manipulating the decentralized exchange Mango Markets in a massive multi-million dollar scam, is slated to stand trial on Dec. 4 in New York.<\/p>\n

The scam was carried out on October 11, 2022, with Mango Markets tweeting at the time that a hacker had manipulated the platform’s price oracle, resulting in a loss of approximately $110 million.<\/p>\n

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The US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have both brought charges against him.<\/p>\n

Eisenberg has been accused by the CFTC of engaging in fraudulent activities, market manipulation, and violating the Commodity Exchange Act.<\/p>\n

The organization is pursuing financial sanctions, a prohibition on engaging in the buying and selling of virtual asset commodities, and reimbursement of funds.<\/p>\n

An Alleged Scheme Unfolds<\/strong><\/h2>\n

According to the CFTC’s filing, Eisenberg’s scheme sought to artificially inflate the value of his swap contract holdings on Mango Markets.<\/p>\n

He allegedly intended to borrow the huge amount of digital assets without repaying them.<\/p>\n

Mango Markets is a Solana-based DEX governed by a Decentralized Autonomous Organization (DAO) composed of holders of its native token, MNGO.<\/p>\n

The platform provides a range of financial services to cryptocurrency investors, including the ability to lend, borrow, swap, and utilize leverage for trading purposes.<\/p>\n

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On December 27, 2022, the U.S. Department of Justice arrested Eisenberg<\/u> for his involvement in the Mango Markets scam, which he admitted on Twitter and described as “a highly profitable trading strategy.”<\/p>\n

To carry out the scam, it is believed Eisenberg created two anonymous accounts on Mango Markets just before the hack and funded each with $5 million in USDC.<\/p>\n

He employed one account to create a long position valued at $19 million, which included more than 400 million swaps of MNGO\/USDC at roughly $0.04 each.<\/p>\n

He then used the second account to establish a short position of the same value and number of MNGO\/USDC Swaps.<\/p>\n

The CFTC states that this effectively resulted in a “wash” transaction, with Eisenberg concealing his involvement by creating both accounts anonymously.<\/p>\n

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Following the security breach, Mango DAO proposed a $47 million reward to the individual responsible for exploiting the vulnerability, along with a guarantee of immunity from legal proceedings, on the condition that they return tokens worth $67 million.<\/p>\n

Eisenberg, the perpetrator, publicly accepted the terms of the agreement. However, it is currently uncertain whether the tokens were indeed returned to Mango DAO.<\/p>\n

While Mango Market DAO and its community may show leniency, the US legal system and law enforcement agencies are known to be less merciful.<\/p>\n

A December Trial Awaits<\/strong><\/h2>\n

The cryptocurrency community is closely following the upcoming trial of Avraham Eisenberg, who faces federal charges of commodities fraud, commodities manipulation, and wire fraud.<\/p>\n

Eisenberg’s plea of not guilty on January 9, 2023, has set the stage for a high-stakes trial on Dec. 4 that could yield a 20-year prison sentence.\u00a0<\/p>\n<\/p><\/div>\n