NEW YORK – A Manhattan jury has discovered crypto dealer Avi Eisenberg responsible on fraud and market manipulation for his $110 million heist from decentralized finance protocol Mango Markets in October 2022.
Eisenberg was arrested in Puerto Rico in December 2022 and charged with commodities fraud, commodities manipulation, and wire fraud for the scheme. He has not but been sentenced by New York District Court docket Choose Arun Subramanian, however faces as much as 20 years in federal jail for his crimes.
Throughout his trial in New York’s Southern District, Eisenberg’s protection tried to spin his trades on Mango Markets as “profitable and authorized,” arguing that they “absolutely complied” with the decentralized protocol’s scanty guidelines on the time of the heist.
However the 12-person jury didn’t purchase it, as a substitute siding with prosecutors’ arguments that Eisenberg’s actions constituted “brazen” fraud and manipulation.
Eisenberg is the newest crypto felony to be convicted of fraud, following shortly on the heels of FTX founder Sam Bankman-Fried’s conviction and subsequent 25 12 months sentence for his position within the collapse of FTX, and Terraform Labs co-founder Do Kwon being discovered responsible for fraud in civil fraud case in opposition to him earlier this month.
On October 11, 2022, Eisenberg made three large MNGO perpetual futures trades between himself, pumping the value over 1000% after which utilizing his newly-created collateral to trick the protocol into permitting him to “borrow” $110 million in varied cryptocurrencies.
However Eisenberg wasn’t “borrowing,” he was stealing – hours after the exploit, he posted an nameless proposal to the Mango Markets decentralized autonomous group (DAO) providing to return $67 million of his ill-gotten positive factors in change for a promise to not pursue prices in opposition to him and permission to pocket the remainder.
Although Eisenberg’s protection workforce, headed by well-known crypto protection lawyer Brian Klein, argued that Eisenberg was appearing throughout the legislation, prosecutors confirmed the jury a bucket of proof – together with web searches for issues like “statute of limitations market manipulation” and “FBI surveillance” and “parts of fraud” and his flight to Israel after his identification because the exploiter was unmasked – indicating he knew his actions have been felony.