- The Mango Markets platform wants its money back from Avraham Eisenberg after losing $114 million in October last year.
- The platform seeks restitution of the $47 million the crypto trader allegedly siphoned, plus interest.
- Eisenberg is in legal battles with several U.S. federal entities, including the Securities and Exchange Commission (SEC)
Decentralized Finance (DeFi) protocol Mango Markets has sued Avraham Eisenberg for the $47 million in digital assets he retained after manipulating the price of MNGO back in October. A Wednesday filing with the United States District Court for the Southern District of New York claims that the trader who drained funds from Mango, Eisenberg, executed a malicious attack on the DeFi protocol by manipulating the native token MNGO.
Eisenberg manipulated the Mango Markets through fraud and deception and converted about $114 million from the depositors of the protocol into his accounts. He later returned $67 million but retained a “bug bounty,” according to the filing. The Mango Markets now is claiming the remaining $47 million back in damage, in addition to interest from the time of the exploit in October last year.
The Mango Market’s related decentralized autonomous organization (DAO) and Eisenberg got into an agreement that enabled the exploiter to keep the $47 million from the exploit while protecting him against any potential criminal probe. The filing stated,
“[Eisenberg] forced Mango DAO to enter into an unenforceable settlement agreement under duress- purporting to release depositors’ claims against him, precluding them from pursuing a criminal investigation. Following the Mango DAO vote regarding Defendant’s request, he returned approximately $67 million of the money he acquired unlawfully.”
However, the protocol provider called Eisenberg a “notorious crypto market manipulator” and alleged that the exploiter has a history of attacking multiple platforms and manipulating the digital assets market. Notably, the Mango Labs noted that Eisenberg was allegedly involved in a DeFi project known as Fortress DAO, embezzling $14 million from it while serving as a developer.
Eisenberg’s battle with the U.S. federal entities
Recently, Eisenberg, who happens to be a crypto trader and software coder, has been facing several charges and lawsuits from different entities, including the Securities and Exchange Commission. Last October, an attacker drained about $117 million from Mango Markets’ by manipulating the price oracle data of its native Mango (MNGO) token, enabling them to take out under-collateralized loans. Later on, Eisenburg, via Twitter, outed himself as the attacker. Eisenberg described the incident as a highly profitable trading strategy and a legal open market action using the designed protocol.
In December, Eisenberg was arrested in Puerto Rico and charged by the Federal Bureau of Investigation with counts of commodity fraud and manipulation for his attack on the platform. He was denied bail because the judge deemed him a “flight risk.”
On January 9, after a follow-up on the FBI’s charges, the Commodity Futures Trading Commission (CTFC) pinned Eistenberg with two counts of market manipulation. On January 20, the U.S. Securities and Exchange Commission (SEC) further blew the exploiter with charges of violations linked to anti-fraud market manipulation provisions of U.S. securities regulations.
