Avraham Eisenberg, a 27-year-old crypto trader, has been found guilty on all counts of commodities fraud, commodities manipulation, and wire fraud in a federal court in Manhattan.
Avraham Eisenberg, a 27-year-old crypto trader, has been found guilty on all counts of commodities fraud, commodities manipulation, and wire fraud in a federal court in Manhattan. The case revolves around Eisenberg's manipulation of the Solana-based decentralized finance (DeFi) platform Mango Markets in October 2022. Eisenberg sold significant volumes of MNGO perpetuals between his own controlled accounts, artificially inflating the price of MNGO. He then used the manipulated collateral to deceive the protocol into allowing him to "borrow" $110 million in various cryptocurrencies.
Following the exploitation, Eisenberg made an anonymous proposal to Mango Market's decentralized autonomous organization (DAO), offering to return $67 million of the stolen funds in exchange for permission to keep the remaining $43 million and a promise to avoid legal repercussions. However, the DAO rejected the proposal, leading to Eisenberg's arrest and subsequent trial.
Eisenberg's defense team, led by crypto lawyer Brian Klein, argued that his trades on Mango Markets were lawful and compliant with the decentralized protocol's rules at the time of the incident. They claimed that the trades were successful and fully aligned with the protocol's functionalities. However, the prosecution countered these arguments, asserting that Eisenberg had malicious intent from the beginning. They presented evidence of Eisenberg's internet searches related to market manipulation and fraud, as well as his attempt to flee to Israel after the exploit came to light.
The jury deliberated and concluded that Eisenberg had taken advantage of an ineffective price oracle to deceive the system, constituting fraudulent behavior. As a result, he was found guilty on all charges. The conviction comes after a week-long trial, and Eisenberg now faces a potential prison sentence of up to 20 years. However, the sentencing by New York District Court Judge Arun Subramanian is yet to be determined.
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