Crypto trader Avraham “Avi” Eisenberg was convicted by a Manhattan jury in October 2022 of orchestrate a $110 million fraud program targeting decentralized finance (DeFi) protocol, Mango Markets.
According to prosecutors, Eisenberg, operating under a false identity, allegedly engaged in market manipulation to drive up the price of Mango’s token, MNGO and related contracts, ultimately exploiting an exchange function to withdraw $110 million in cryptocurrency without intention of repayment.
Avi Eisenberg’s manipulation scheme revealed
During the trial, prosecutors revealed that Eisenberg manipulated the price of MNGO tokens to cheat the system and acquire illicit funds. By “artificially inflating” the value of the token, Eisenberg allegedly sought to perpetrate deliberate fraud against Mango Markets.
Assistant U.S. Attorney Thomas Burnett emphasized Eisenberg’s intention to “take the money and run,” alleging that he meticulously planned and executed the fraud.
Shortly after making a significant financial gain, Eisenberg fled Puerto Rico, where he was residing, for Israel. However, upon his return to Puerto Rico on December 26, 2022, U.S. authorities arrested him. Eisenberg has remained in detention a judge has since deemed him a flight risk before his trial.
Clash between prosecutors in mango fraud trial
During the trial, Eisenberg’s defense attorney, Brian Klein, argued that his client implemented a trading strategy that was legal within the exchange’s rules.
Klein argued that Eisenberg took calculated risks within the confines of the smart contracts governing the decentralized finance platform. He also highlighted the platform’s disclaimer that warned users of the unaudited nature of the software and the associated risks.
Assistant U.S. Attorney Thomas Burnett rebutted the defense argument, saying Mango Markets’ platform rules did not protect Eisenberg from prosecution for fraud and manipulation.
Eisenberg did not testify during the trial, but he took an active role in his defense, taking notes throughout the testimony and frequently suggesting questions for the witnesses to ask his attorneys.
Following Eisenberg conviction, the price of the MNGO token saw a notable rise, reaching $0.029. This represents a notable increase of 11.5% in the last 24 hours alone.
Over broader time frames, contrasting with the performance of the overall cryptocurrency market, MNGO has demonstrated significant gains of 69% and 46% over the past fourteen and thirty days, respectively. These figures indicate a renewed interest in the token after the Mango Markets protocol exploit.
However, despite these recent gains, the MNGO token remains significantly below its all-time high of $0.49, reached in September 2021. The current price reflects a 94% decline from this all-time high.
Featured image from Shutterstock, chart from TradingView.com
