A federal trial in New York begins Tuesday for Avraham Eisenberg, charged with fraud and manipulation in connection with a $116 million exploit from the Solana-based DeFi exchange Mango Markets. Eisenberg, who admits to orchestrating the attack, claims it was a "profitable business strategy" that exploited the protocol's design. The trial is expected to last two weeks and may result in a sentence of up to 20 years in prison if Eisenberg is found guilty of wire fraud.
Federal Trial Commences in $116 Million DeFi Exchange Fraud Case
A federal court in New York has commenced a trial against Avraham Eisenberg, accused of orchestrating a fraudulent and manipulative scheme involving the Solana-based DeFi exchange, Mango Markets. The trial, expected to span two weeks, will delve into the intricate details of the alleged $116 million exploit.
Eisenberg, along with his defense team, initially scheduled the trial for December 4, 2023, but it was postponed at their request. While Eisenberg admits to orchestrating the attack on Mango Markets in October 2022, he asserts that it was a legitimate "highly profitable business strategy" that exploited the protocol's inherent design.
The strategy entailed inflating the platform's native Mango token by manipulating the price oracle, which in turn allowed Eisenberg to secure approximately $116 million in crypto loans using the inflated tokens as collateral. This ultimately rendered the platform insolvent. Following the incident, Eisenberg reportedly agreed to return $67 million to Mango DAO.
However, Eisenberg's actions drew the attention of the Department of Justice, the Commodity Futures Trading Commission, and the Securities and Exchange Commission, leading to his indictment in December 2022. In the United States, wire fraud charges carry a maximum prison sentence of up to 20 years.
Disclaimer:
The Block, as an independent media outlet, provides news, research, and data to its readers. Foresight Ventures has held a majority stake in The Block since November 2023, investing in other crypto-related entities. Bitget, a crypto exchange, serves as an anchor liquidity provider for Foresight Ventures.
Despite these connections, The Block maintains its editorial independence, striving to provide objective, impactful, and relevant information about the crypto industry. For further transparency, The Block publishes its financial information regularly.
