Mango Markets Exploiter Found Guilty of Fraud and Manipulation

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A jury has delivered a verdict in the case of Avraham “Avi” Eisenberg, the individual behind a $110 million exploit of the Mango Markets decentralized exchange, finding him guilty of fraud and market manipulation. 

The decision, announced on April 18 in the United States District Court for the Southern District of New York, followed extensive deliberations after closing arguments the day before.

“Avraham Eisenberg executed a manipulative trading scheme on a cryptocurrency exchange, defrauding the exchange and its investors out of $110 million,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri.

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Mango Markets Exploiter’s Sentencing

Throughout the two-week trial, Eisenberg’s defense team contended that his actions did not constitute criminal behavior but rather represented a “successful and legal trading strategy,” resulting in approximately $110 million from Mango Markets. 

While Eisenberg did return about $67 million of the funds after the exploit of Mango Markets, he retained more than $40 million following a governance vote by the community. However, prosecutors argued that his actions amounted to fraud.

“The career prosecutors of this office continue their expertise in prosecuting financial fraud, one of our core priorities, and would-be financial criminals should think twice before daring to engage in illicit conduct on our watch,” said US Attorney Damian Williams for the Southern District of New York.

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20 Years in Prison for Exploiting Mango Markets

The verdict brings Eisenberg potentially facing severe consequences, as Judge Richard Berman is set to sentence him at a hearing scheduled for July 29. Eisenberg now faces a maximum sentence of 20 years in prison. 

After his activities on Mango Markets in October 2022, Eisenberg was arrested in Puerto Rico in December and has been in U.S. custody since January 2023.

With the criminal trial concluded, Eisenberg may face civil enforcement actions from the US Securities and Exchange Commission and the Commodity Futures Trading Commission, both of which filed cases in 2023. These cases had been stayed but could resume two weeks after the conclusion of the criminal trial.

Criminal Proceedings in the Crypto Space 

This case adds to the list of ongoing criminal proceedings involving prominent figures in the cryptocurrency sphere. In March, former FTX CEO Sam Bankman-Fried was sentenced to 25 years in prison for seven felony charges, though his legal team has indicated their intention to appeal. 

Additionally, former Binance CEO Changpeng Zhao is set to be sentenced on April 30 after pleading guilty to one felony charge.

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