US charges accuse crypto manipulator Mango of fraud

NEW YORK, Dec 27 (Reuters) – U.S. prosecutors have filed criminal charges of fraud and commodity manipulation against a man accused of attempting to steal an estimated $110 million in October by rigging the crypto exchange -Mango Markets currency.

Avraham Eisenberg’s trading in futures contracts linked to Mango’s MNGO crypto token allowed him to withdraw $110 million in cryptocurrency from other investors’ deposits, according to a complaint made public Tuesday in Manhattan federal court. , with no apparent intention to repay the funds.

Eisenberg could not immediately be reached for comment, and it is not known if he has an attorney.

Mango is a decentralized cryptocurrency exchange operated by Mango DAO that allows investors to lend, borrow, trade, 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 simultaneously buy and sell futures contracts based on the relative values ​​of MNGO and the stablecoin USD Coin ( USDC).

By being on both sides of the transaction, Eisenberg artificially inflated MNGO’s price against USDC, allowing it to borrow and then withdraw $110 million of different cryptocurrencies, according to the complaint.

Mango quickly entered into negotiations with Eisenberg and reached a settlement to recover $67 million.

“All Mango depositors will be cured,” with token holders voting for the settlement agreeing “not to pursue criminal investigations or freeze funds once tokens are returned,” a community post said at the time. .

Eisenberg claimed responsibility for the trading, according to the complaint, and tweeted on Oct. 15 that “the exchange on which this took place, Mango Markets, has become insolvent.”

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

Mango could not immediately be reached for comment. U.S. Attorney Damian Williams’ office in Manhattan did not immediately respond to a request for comment.

The case is US v. Eisenberg, US District Court, Southern District of New York, No. 22-mj-10337.

Reporting by Jonathan Stempel in New York; Additional reporting by Hannah Lang Editing by Rosalba O’Brien

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