US Charges Accused Mango Crypto Manipulator With Fraud

https://www.businesstimes.com.sg/international/us-charges-accused-mango-crypto-manipulator-fraud

US PROSECUTORS have filed criminal charges of commodities fraud and manipulation against a man accused of trying to steal about US$110 million in October by rigging the Mango Markets cryptocurrency exchange.

According to a complaint made public on Tuesday in Manhattan federal court, Avraham Eisenberg’s trades in futures related to Mango’s crypto token MNGO enabled him to withdraw US$110 million in cryptocurrencies from other investors’ deposits, with no apparent intention to repay the funds.

Eisenberg could not be immediately reached for comment, and it is unclear whether he has a lawyer.

Mango is a decentralised cryptocurrency exchange run by Mango DAO that lets investors lend, borrow, swap, and use leverage to trade cryptocurrency assets.

The Dec 23 complaint signed by FBI Special Agent Brandon Racz said Eisenberg on Oct 11 used two accounts to concurrently buy and sell futures based on the relative values of MNGO and the stablecoin USD Coin (USDC).

By being on both sides of the transaction, Eisenberg artificially inflated the price of MNGO relative to USDC, allowing him to borrow and then withdraw US$110 million of different cryptocurrencies, the complaint said.

Mango soon began negotiations with Eisenberg and reached a settlement to recoup US$67 million.

“All mango depositors will be made whole,” with token holders who vote for the settlement agreeing not to “pursue any criminal investigations or freezing of funds once the tokens are sent back,” a community post said at the time.

Eisenberg claimed responsibility for the trading, the complaint said, and tweeted on Oct 15 that “the exchange this took place on, Mango Markets, became insolvent.”

He also tweeted: “I believe all of our actions were legal open market actions, using the protocol as designed, even if the development team did not fully anticipate all the consequences of setting parameters the way they are.”

Mango could not immediately be reached for comment. The office of US Attorney Damian Williams in Manhattan did not immediately respond to a request for comment