Mango Markets Hacker Arrested in Puerto Rico

Avraham Eisenberg, the crypto trader behind the exploit on the Solana-based Decentralized Finance (DeFi) platform Mango Markets has been arrested in Puerto Rico.

The self-acclaimed game theorist admitted to having been responsible for the attack on the Mango Market with a “highly profitable trading strategy” leading to the loss of over $110 million worth of cryptocurrencies. 

“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,” the transcripts of a deposition signed by FBI Special Agent Brandon Racz alleges Eisenberg revealed.

Currently, he has been charged for his role in manipulating the decentralized exchange. An unsealed filed complaint with the Southern District of New York says that the Federal Bureau of Investigation (FBI) has charged Eisenberg with two counts.

The first one is for commodities fraud and the other count is for commodities manipulation. Eisenberg may be made to pay a fine or face jail time 

From the outlook of the situation, Avraham Eisenberg may be the first United States resident to be faced with such charges against a DeFi platform. 

Mango Market and the $116M Exploit

In October, Mango Market announced the breach on its platform. According to the DeFi platform, a hacker had used an oracle price manipulation to steal funds from the platform’s treasury. 

The hacker temporarily increased the value of the collateral and tools out huge loans form the Mango Market treasury. At the time, the platform acknowledged that it was induced by “an economic design flaw.”

Thereafter, the hacker became manipulative and offered 483 million units of MNGO perps. Another account was funded with 5 million USDC in collateral to purchase those 483 million MNGO perps at $0.03 each. The manipulation continued, pushing the price to $0.91 and the 483 million MNGO’s worth to $423 million. 

At the end of the day, the hacker drained $116 million worth of USDC, MSOL, SOL, BTC, USDT, SRM, and MNGO from the Mango Market platform. To return the stolen assets, the hacker requested a $47 million bounty which Mango Market conceded to. The DeFi trading platform made plans to pay off the sum which was worth more than 30% of the stolen funds.

Despite the settlement, US authorities believe Eisenberg needs to be charged for market manipulation.