US Officials Nab Mango Markets Attacker Behind $110M Exploit, Charge Him With Fraud

Mango Markets attacker Avraham "Avi" Eisenberg, the man behind the $110 million exploit of the decentralized finance (DeFi) trading platform, was arrested in Puerto Rico Monday and charged with commodities fraud and market manipulation by U.S. prosecutors from the Southern District of New York (SDNY).

The self-proclaimed game theorist, whose "profitable trading strategy" drained millions from Mango Markets, admitted his role in the incident in mid-October and might be the first U.S. resident to face charges because of it.

The complaint filed in the Manhattan federal court noted that Eisenberg traded in futures related to Mango Markets' crypto token MNGO, which allowed him to withdraw $110 million from other investors' deposits with no intention of returning the funds.

Eisenberg allegedly used two accounts to buy and sell futures based on the relative values of MNGO and USDC, Federal Bureau of Investigation special agent Brandon Racz said in a complaint dated Dec. 23.

Eisenberg then sold massive amounts of MNGO perpetual contracts to himself. This resulted in a huge pump in the price of those contracts, skyrocketing to 1,300% in less than an hour.

He later borrowed against his position and "withdrew essentially all of the cryptocurrency deposits on the Mango Markets platform," which allegedly netted him more than $110 million, the complaint also indicated.

"Eisenberg engaged in a scheme involving the intentional and artificial manipulation of the price of perpetual futures contracts on a cryptocurrency exchange called Mango Markets, and other manipulative and deceptive devices and contrivances," the FBI special agent said in his deposition, as per the document.

Eisenberg's activity caused the platform to be insolvent, as it sent the price of MNGO down by 50% and 95% lower than its all-time high price of $0.50 in September 2021. The exploit also left DeFi lending giant Aave with $1.7 million in bad debt.

Following the incident, Eisenberg publicly admitted to carrying out the attack. He even talked about it on his official Twitter account, calling the exploit a "highly profitable trading strategy."

"Statement on recent events: I was involved with a team that operated a highly profitable trading strategy last week," his tweet read.

Eisenberg returned $67 million to Mango's DAO at the time of his admission after he negotiated with Mango Markets.

The DeFi platform said it would not pursue criminal investigations, but it did not prevent U.S. law enforcement from prosecuting the attacker.