Mango Labs Indicts Avraham Eisenberg For Mango Market $116M Exploit

For the fourth time, Avraham Eisenberg, the hacker behind the $116 million exploit on Decentralized Finance (DeFi) protocol Mango Markets, has been sued. This time around, Mango Labs which is the company behind Mango Market filed a lawsuit against the fraudulent crypto trader in the United States District Court for the Southern District of New York and is asking for $47 million in damages.

In addition, Mango Labs has asked for interest on the stolen fund starting from the time of the exploit. Before this current filing, Eisenberg submitted a governance proposal that requested that Mango’s related Decentralized Autonomous Organisation (DAO) permit him to keep $47 million as his bug bounty while he returns about $67 million to the protocol. Also, Mango Market was expected to drop all charges against the hacker.

At the time, the Mango Market conceded to this proposal with 98% yes votes from its DAO community. Presently, the firm wants the court to revoke the former agreement between Eisenberg and Mango’s related DAO, declaring it “invalid and unenforceable.” In its argument, Mango Labs stated that Eisenberg did not engage in a lawful bargain.

“[Eisenberg] forced Mango DAO to enter into an unenforceable settlement agreement—under duress—purporting to release depositors’ claims against him and precluding them from pursuing a criminal investigation.”

Avraham Eisenberg Charged With Multiple Counts

Mango Market was a victim of an oracle price manipulation which led to the loss of over $116 million from its protocol in October. According to OtterSec, a blockchain auditing website, the perpetrator temporarily increased the value of their collateral and withdrew huge loans from the Solana-based spot margin and perpetual futures crypto trading platform.

Avraham Eisenberg later came out to say he is the perpetrator behind the exploit and was immediately arrested in Puerto Rico. At first, the Federal Bureau of Investigation (FBI) charged him with two counts; one for commodities fraud and the other count for commodities manipulation. 

At the beginning of this year, the Commodity Futures Trading Commission (CFTC) filed a civil action against Eisenberg for executing a fraudulent scheme against the Mango Market exchange. Two weeks after, the U.S. Securities and Exchange Commission (SEC) charged the Mango Market attacker with violating anti-fraud and market manipulation provisions of the security laws.