Mango Crypto Manipulator Charged With Fraud in the U.S.

Jonathan Stempel's NEW YORK (Reuters) - The U.S. Prosecutors in the United States have filed criminal accusations of commodities fraud and manipulation against a man suspected of attempting to steal around $110 million in October by manipulating the Mango Markets cryptocurrency exchange.

Avraham Eisenberg's trading in futures relating to Mango's crypto token MNGO allowed him to take $110 million in cryptocurrencies from other investors' accounts, according to a lawsuit made public on Tuesday in Manhattan federal court.

Eisenberg could not be contacted for comment immediately, and it is unknown if he has a lawyer.

Mango is a decentralized cryptocurrency exchange hosted by Mango DAO that allows investors to lend, borrow, swap, and trade bitcoin assets using leverage.

According to the Dec. 23 complaint filed by FBI Special Agent Brandon Racz, Eisenberg utilized two accounts on Oct. 11 to purchase and sell futures based on the relative prices of MNGO and the stablecoin USD Coin (USDC).

Eisenberg intentionally raised the price of MNGO compared to USDC by being on both sides of the transaction, enabling him to borrow and then withdraw $110 million in various cryptocurrencies, according to the lawsuit.

Mango quickly launched discussions with Eisenberg and achieved a $67 million settlement.

“All mango depositors will be made whole,” with token holders who vote on the settlement promising not to “pursue any criminal investigations or freeze of funds after the tokens are paid back,” a community post stated at the time.

According to the lawsuit, Eisenberg claimed responsibility for the transaction and tweeted on Oct. 15 that “the exchange this took place on, Mango Markets, fell bankrupt.”

“I think all of our acts were lawful open market actions, utilizing the protocol as intended, even if the development team did not completely foresee all of the repercussions of setting parameters the way they are,” he said on Twitter.

Mango could not be contacted for comment right away. The Manhattan office of U.S. Attorney Damian Williams did not immediately reply to a request for comment.

The case is United States v. Eisenberg, Southern District of New York, No. 22-MJ-10337.

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