The Securities and Exchange Commission (SEC) has charged Avraham Eisenberg, a 27-year-old U.S. citizen who was arrested and detained at MDC Guaynabo, Puerto Rico, with attempting to manipulate MNGO tokens – the native token of Mango Markets. Eisenberg is expected to appear before the Southern District of New York, where he is facing parallel criminal charges.
Earlier this month, it was reported that the Commodity Futures Trading Commission (CFTC) had filed a lawsuit against Eisenberg, alleging the fraudulent scam to abscond with over $110 million in digital assets from Mango Markets.
The SEC complaint pegs the amount at $116 million.
In regards to the SEC’s complaint, it alleges that beginning in October 2022, Eisenberg purchased perpetual futures on MNGO while selling those same futures on another account he controlled. He then purchased a significant quantity of MNGO to pump the price. As the value of his futures increased, he used the position to borrow and withdraw other crypto assets, effectively draining Mango Markets.
Following the scam, Eisenberg returned $67 million to Mango Markets in an attempt to cut a deal with the decentralized exchange – asking that no criminal investigations would be pursued.
Around 22:00 UTC October 11th the 🥭 protocol had an incident involving the following:
-2 accounts funded with USDC took an outsized position in MNGO-PERP
-Underlying MNGO/USD prices on various exchanges (FTX, Ascendex) experienced a 5-10x price increase in a matter of minutes
— Mango (@mangomarkets) October 12, 2022
David Hirsch, Chief of the Crypto Assets and Cyber Unit, claimed that the deceptive scheme left the platform at a deficit when the security price returned to its pre-manipulation level.
“As our action shows, the SEC remains committed to rooting out market manipulation, regardless of the type of security involved,” said Hirsch.
The SEC’s complaint, filed in federal district court in Manhattan, charges Eisenberg with violating anti-fraud and market manipulation provisions of the securities laws and seeks permanent injunctive relief, a conduct-based injunction, disgorgement with prejudgment interest, and civil penalties.