Mango Markets Attacker Guilty of Fraud Over $110 Million Exploit

Crypto trader Avraham Eisenberg was convicted Thursday in U.S. federal court of manipulating Solana decentralized finance (DeFi) trading platform Mango Markets in October 2022 to steal $110 million worth of cryptocurrency.

A federal jury found the 27-year-old Eisenberg guilty today on all counts of commodities fraud, commodities manipulation, and wire fraud after a week-long trial in Manhattan. He faces up to 20 years in prison but has not yet been sentenced by New York District Court Judge Arun Subramanian.

Mango Markets is a Solana-based decentralized exchange (DEX) governed by a DAO made up of holders of its native token, MNGO, that lets investors lend, borrow, swap, and use leverage to trade crypto. Back in 2022, Eisenberg sold huge amounts of MNGO perpetuals between accounts that he controlled, pumping the price of MNGO by several orders of magnitude.

As Decrypt reported, he then used his artificially pumped collateral to trick the protocol into allowing him to “borrow” $110 million in various cryptocurrencies. 

Within hours of draining Mango’s pools, Eisenberg published an anonymous proposal to the protocol’s decentralized autonomous organization (DAO), offering to return $67 million of the stolen funds in exchange for permission to keep the remaining $43 million and a promise not to pursue charges.

The DAO rejected the proposition.

Eisenberg’s defense team, led by crypto lawyer Brian Klein, argued that his trades on Mango Markets were “successful and legal,” claiming that they “fully complied” with the decentralized protocol’s rules at the time of the heist, doubling Eisenberg’s arguments on social media. After all, a smart contract cannot execute instructions it wasn’t designed to execute.

However, the prosecution argued that Eisenberg acted with fraudulent intentions by inflating the price of perpetual futures contracts and then using the artificially pumped value of his positions as collateral, never intending to pay the funds back.

“He manipulated that price so he could trick the system into giving him money,” stated Assistant U.S. Attorney Thomas Burnett. “He planned to take the money and run.”

Evidence presented at trial included internet searches by Eisenberg for terms like “statute of limitations market manipulation” and “elements of fraud,” as well as records showing he fled to Israel shortly after the exploit was uncovered. Prosecutors contended these showed Eisenberg knew his actions were criminal.

The jury finally argued that Eisenbergtook advantage of an ineffective price oracle to dupe the system —which is considered fraudulent.

Eisenberg was arrested in Puerto Rico in December 2022, around two months after carrying out the heist. He has been in federal custody awaiting trial since then, and will remain detained pending sentencing by Judge Arun Subramanian at a later date.

Edited by Andrew Hayward

Editor’s note: This story was updated after publication with additional details.