Eisenberg Charged by CFTC For $110M Scam on Mango Markets

Avraham Eisenberg with an alias Mango Avi is still being dragged for the Mango Markets stunt that he pulled three months ago. United States watchdog, the Commodity Futures Trading Commission (CFTC) has filed a civil action against Eisenberg in a U.S. District Court for the Southern District of New York for executing a fraudulent scheme against the Mango Market exchange.

“The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the Southern District of New York charging Avraham Eisenberg with a fraudulent and manipulative scheme to unlawfully obtain over $110 million in digital assets from a purported decentralized digital asset exchange,” per a CFTC published statement.

Notably, this is the first time the watchdog would be filing such enforcement action for a fraud of this nature which involves a decentralized crypto firm. Also, it is CFTC’s first time getting involved with ‘oracle manipulation’, a common attack on Decentralized Finance (DeFi) platforms. 

According to Gretchen Lowe, the Acting Director of Enforcement at CFTC:

“The CFTC will use all available enforcement tools to aggressively pursue fraud and manipulation regardless of the technology that is utilized.” Speaking of the Commodity Exchange Act (CEA), he continued “The CEA prohibits deception and swap manipulation, whether on a registered swap execution facility or on a decentralized blockchain-based trading platform.”

Regulators Pursue Eisenberg

The manipulative crypto trader was arrested in Puerto Rico at the end of 2022 after admitting the part he played in the Mango Markets breach which led to the loss of $110 million. At the time, the Federal Bureau of Investigation (FBI) charged Mango Avi with two counts of commodities fraud and commodities manipulation.

A deposition transcript signed by FBI Special Agent Brandon Racz mentioned that “Eisenberg engaged in a scheme involving the intentional and artificial manipulation of the price of perpetual futures contracts on a cryptocurrency exchange called Mango Markets, and other manipulative and deceptive devices and contrivances.”

Fast forward to the present time, the CFTC is seeking compensation in the form of “civil monetary penalties, disgorgement of any ill-gotten gains, restitution, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA).”