Mango Markets' Exploiter Avi Eisenberg Convicted of Market Manipulation and Fraud

Today,  Mango Markets exploiter Avi Eisenberg was convicted on charges related to the over $110 million exploit. TRM is proud to have supported law enforcement in this investigation and the victim in the incident response.

During the trial, according to reporting by Coindesk, which began on April 9 and last a little over a week, the jury heard how, on October 11, 2022, Eisenberg made three large MNGO perpetual futures trades between himself, pumping the price over 1000% and then using the newly-created collateral to trick the protocol into allowing him to “borrow” $110 million in various cryptocurrencies.

Hours after the exploit, Eisenberg posted an anonymous proposal to the Mango Markets decentralized autonomous organization (DAO) offering to return $67 million in stolen funds in exchange for a promise not to pursue charges against him and permission to retain the rest.

Eisenberg took responsibility a few days after the incident and said his actions were part of a legal, "highly profitable" trading strategy that used Mango Markets as designed.

Eisenberg later returned $67 million in funds to Mango Markets, and the protocol's community allowed him to keep $47 million in a governance vote. Mango Markets lost around $116 million worth of funds in the exploit.

Eisenberg was arrested in December 2022 in Puerto Rico. Prosecutors charged him with commodities fraud, market manipulation and wire fraud in connection with the hack of the decentralized crypto exchange Mango Markets.

During the trial, Eisenberg's defense argued that his actions were lawful and part of a "winning" trading strategy. However, prosecutors argued that the code manipulation amounted to "brazen fraud." The jury sided with the prosecutors who also admitted evidence showing that Eisenberg searched the web for terms such as "market manipulation criminal" and "FBI surveillance."