SEC Charges Mango Exploiter with Market Manipulation, Calls MNGO ‘Security’

An eagle lands on two pieces of mango that have lightning going out of them
  • The U.S. Securities and Exchange Commission (SEC) announced Friday that it had charged Mango Markets exploiter Avraham Eisenberg with market manipulation.
  • The agency called Mango Markets’ native token a “security.”
  • The SEC said Eisenberg manipulated MNGO and stole $116 million from the decentralized exchange.
  • Eisenberg was arrested in Puerto Rico in December. He was charged by the U.S. Department of Justice and the Commodities Futures Trading Commission (CFTC).
  • The investigation into the Mango Markets exploit is still ongoing.

The U.S. Securities and Exchange Commission (SEC) has charged the Mango Markets exploiter Avraham Eisenberg with market manipulation, the agency announced Friday.

According to the SEC, Eisenberg stole around $116 million from the Solana-based decentralized exchange by manipulating the price of MNGO, the platform’s native token. The agency called MNGO a “so-called” governance token and “a security.”

The SEC alleged that Eisenberg sold many perpetual futures for MNGO tokens and then bought them with another account. Then he bought a large amount of MNGO, which inflated its price and allowed him to borrow and withdraw around $116 million worth of various crypto tokens, effectively draining the whole Mango Markets treasury.

“[...] Eisenberg engaged in a manipulative and deceptive scheme to artificially inflate the price of the MNGO token, which was purchased and sold as a crypto asset security, in order to borrow and then withdraw nearly all available assets from Mango Markets, which left the platform at a deficit when the security price returned to its pre-manipulation level,” said David Hirsch, Chief of the Crypto Assets and Cyber Unit. “As our action shows, the SEC remains committed to rooting out market manipulation, regardless of the type of security involved.”

After the attack, Eisenberg took to Twitter to brag about his “highly profitable trading strategy.” Despite many comments about the potential illegality of his actions, he denied it multiple times and said that he believed his actions were legal.

The SEC said Eisenberg carried out his scheme while living in Puerto Rico. He was arrested there in December and charged with criminal and civil misconduct by the U.S. Justice Department and the Commodities Futures Trading Commission (CFTC).

The SEC said it’s still investigating the attack on Mango Markets, including other entities and people related to the event.

On the Flipside

  • Eisenberg has not said a word since his arrest in Puerto Rico in December.
  • Eisenberg returned $67 million a day after the event but kept $47 million as a bounty reward.
  • There might be more revelations as the investigation continues.

Why You Should Care

The arrest of Avraham Eisenberg and the charges brought against him shows how the regulators notice even seemingly unimportant events in the crypto industry. Anyone thinking of doing something similar to what Eisenberg did should reconsider their decision.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Arturas Skur

Arturas Skur is a blockchain content writer focused on Web 3.0 domains, DeFi, and Ethereum Layer-2s. Arturas believes blockchain technology has the potential to transform how we see and interact with society, economy, and culture. Arturas spends his spare time hiking, playing with his dog, and reading. He has been active in blockchain and cryptocurrencies since 2020.