Fraud conviction overturned for DeFi exploiter behind $114M Mango Markets manipulation
In an unexpected turn of events, a decentralized finance (DeFi) platform exploiter convicted in a $114 million manipulation scheme received good news from a court: a judge has overturned his fraud conviction.
By Cybernews.
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In an unexpected turn of events, a decentralized finance (DeFi) platform exploiter convicted in a $114 million manipulation scheme received good news from a court: a judge has overturned his fraud conviction.
According to Judge Arun Subramanian, New York prosecutors had no reason to start the case against Mango Markets exploiter Avraham Eisenberg because "There is no allegation that the Mango Markets platform had ties to New York," as Eisenberg "didn't make trades in New York, call or email anyone in New York, or go to New York in connection with his scheme."
"Eisenberg was never in New York in connection with this scheme; he was in Puerto Rico," the judge ruled, saying that "The Court agrees with Eisenberg" that "the government's cases are inapplicable."
In April 2024, another court found Eisenberg guilty of wire fraud, commodities manipulation, and commodities fraud. Prosecutors were seeking to imprison him for eight years. However, even if the fraud charges have been overturned, the exploiter is still facing four years in prison in a separate case, where he was accused of owning child sexual abuse material.
Meanwhile, the attack on the blockchain-powered DeFi platform Mango Markets happened in October 2022, when the exploiter managed to artificially increase the price of the platform's native token MANGO (MNGO).
Following other manipulative moves, such as opening long positions and borrowing tokens, Eisenberg managed to exploit the platform to the tune of around $114 million. However, after he returned around $67 million, the community of the DeFi platform allowed him to keep the remainder. The exploit itself was controversial, as Eisenberg claims that his trading strategy was legal and that he used the protocol exactly as it was designed.
In either case, Mango Markets shut down its operations in January this year after it reached a settlement with the US Securities and Exchange Commission regarding illegally selling MNGO tokens. The token's price is now down 96% from its all-time highs, while the trading volume in the past 24 hours barely surpassed $2,000.
