Avraham Eisenberg Found Guilty in $110 Million DeFi Scheme

In a significant verdict from a Manhattan courtroom, Avraham "Avi" Eisenberg has been convicted of a fraud scheme that siphoned $110 million from the Mango Markets, a decentralized finance (DeFi) platform. The October 2022 judgment highlights a deep dive into market manipulations within the crypto world.

Eisenberg, under an alias, reportedly manipulated the market to inflate the price of Mango’s token, MNGO, and its derivatives, enabling him to extract a vast sum of cryptocurrency without plans for repayment. His actions not only questioned the security protocols of DeFi platforms but also their vulnerability to orchestrated attacks.

Avi Eisenberg's illegal manipulation scheme exposed

Prosecutors pointed out that Eisenberg’s market tampering was designed to deceitfully enrich himself by artificially boosting the token’s value. Assistant US Attorney Thomas Burnett underscored Eisenberg's intention to abscond with the funds, noting a meticulously planned execution of the fraud.

After the fraudulent gain, Eisenberg fled from Puerto Rico to Israel, only to be apprehended upon his return to Puerto Rico by US authorities on December 26, 2022. He has been detained since, with the court considering him a flight risk.

Eisenberg's defense attorney Brian Clay's weak defense

In contrast, Eisenberg's defense maintained that his trading actions were within the legal boundaries set by the Mango Markets’ platform rules. His attorney, Brian Klein, argued that Eisenberg engaged in legitimate trading strategies permissible under the smart contracts of the platform, despite the inherent risks acknowledged by the platform's unaudited nature.

However, this defense was challenged by prosecutors, stating that the platform's rules do not exempt Eisenberg from fraud charges.

Following his conviction, MNGO's market value saw an 11.5% increase within 24 hours, indicating a volatile response to the trial's outcome. Despite these short-term gains, the token still trades far below its peak price, reflecting persistent investor wariness.

Source: Tradingview