The Commodity Futures and Trading Commission (CFTC) has accused Mango Markets developer Avraham Eisenberg of violating federal commodity laws during his $110 million fraudulent attack in October.
The commission is seeking various forms of sanctions and relief from the attacker, including trade bans, compensation and renunciation of consent.
for all of that complaint The CFTC said Monday that Eisenberg misappropriated more than $100 million from the Mango Markets platform by engaging in a “manipulative” and “fraudulent” scheme to inflate the price of swaps on the platform.
During October Exploiting, Eisenberg manipulated the price of MNGO – the platform’s native token – so he could “borrow” a lot of money from the platform that he didn’t intend to pay back. He did this by initially purchasing 400 million MNGO-USDC swaps on Mango Markets for approximately $19 million. Due to MNGO’s relative illiquidity, this purchase caused the token’s price to jump from $0.04 to $0.54 each within 30 minutes.
By using an oracle of the protocol that mirrored MNGO’s newly inflated price, Eisenberg was able to “borrow” – or drain – the protocol of all available liquidity. This included $114 million in the most liquid and popular cryptocurrencies, such as Bitcoin, Ether, and Tether. This left Mango Markets and its other users with smaller trade sizes “carrying a mostly empty bag”.
“Through this conduct, the defendant has engaged in, engaged in, or is about to engage in fraudulent and fraudulent acts and practices in violation of the Commodity Exchange Act,” the commission explained.
Access to the law
While most DeFi hackers are concerned with keeping their identities secret, Eisenberg publicly bragged about his exploits on Mango Markets shortly after committing his attack. Weeks later, he referred to his achievement as “a lucrative business”. accusatory his critics for being “jealous”.
“I believe all of our actions were legal in the open market, using the protocol as designed, although the development team did not fully foresee all the consequences of setting the standards as they are,” he said at the time.
However, the CFTC argued otherwise in its filing, saying the developer’s actions “constitute clear manipulation of spot prices and swaps.”
It was Eisenberg Arrested Late last year in Puerto Rico by the Department of Justice on similar charges imposed in New York. In a signed affidavit, FBI Special Agent Brandon Rush stated that Eisenberg may have secretly known his actions were illegal, based on his departure to Israel within 24 hours of the Davey wiretap.
Eisenberg and his team were subsequently responsible for launching one Short attack on Aave, which ultimately failed and led to great losses on his part.
Mango Markets Exploiter Post With Post-CFTC Market Manipulation appeared first on CryptoPotato.