Avraham Eisenberg, a 28-year-old crypto trader, was found guilty of fraud on the Solana decentralized finance (DeFi) platform, Mango Markets.
This involved a scheme that allowed him to exploit $110 million in cryptocurrencies.
Mango Markets Hacker Case Comes to Light After Two Years
The verdict, issued by a federal jury in New York, found the crypto trader – Eisenberg guilty of commodities fraud, commodities manipulation, and wire fraud after a week-long trial in Manhattan. Although not yet sentenced by the New York District Court Judge, Eisenberg faces a possible sentence of up to 20 years in prison.
Mango Markets, a decentralized exchange (DEX) on Solana, maintains its governance based on a Decentralized Autonomous Organization (DAO). It is composed of holders of its native token, MNGO. This allows investors to lend, borrow, trade, and use leverage to operate with cryptocurrencies.
Read more: Top 7 Projects on Solana With Massive Potential
In 2022, Eisenberg conducted an oracle price manipulation attack on Mango Markets. He temporarily pumped the price of MNGO and drained the liquidity out of the platform.
Within hours after draining Mango Markets’ funds, Eisenberg posted an anonymous proposal to the protocol’s DAO. He offered to return $67 million of the stolen funds in exchange for permission to keep the remaining $43 million. However, the DAO rejected the proposal.
Eisenberg’s defense team, led by cryptocurrency lawyer Brian Klein, argued that his operations on Mango Markets were “successful and legal.” They further claimed that they “fully complied” with the decentralized protocol’s rules then.
Nevertheless, the prosecution contended that Eisenberg had fraudulent motives, alleging that he artificially increased the price of perpetual futures contracts. Subsequently, he used the inflated value of these positions as collateral with no intention of repaying the funds.
Read more: What are Perpetual Futures Contracts in Cryptocurrency?
“He manipulated that price so he could trick the system into giving him money. He planned to take the money and run,” Assistant US Attorney Thomas Burnett said.
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