Attacker of DeFi platform Mango arrested in Puerto Rico! FBI accuses of commodity fraud and manipulation.
The DeFi platform Mango on Solana was attacked in October, with Twitter user Avraham Eisenberg manipulating the spot market price of the MNGO token and borrowing a large amount of platform assets from the derivatives market to drain Mango's liquidity within a few hours. Avraham Eisenberg's malicious actions have recently led to charges by FBI investigators, and he has been arrested in Puerto Rico.
Full story: DeFi platform Mango hacked | Long and short positions, market manipulation, draining $116 million in assets
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Mango Attacker Faces Multiple Charges
According to the court documents from the U.S. Southern District, FBI Special Agent Brandon Racz has charged Avraham Eisenberg with commodities fraud and manipulation for the following reasons:
- Attempting to manipulate devices and scheme to defraud.
- Attempting to make deceptive and misleading statements regarding material facts.
- Attempting to defraud others.
"Avraham Eisenberg is accused of intentionally and artificially manipulating the Mango perpetual contract market price," described Brandon Racz.
By manipulating Mango Markets, Avraham Eisenberg made $116 million overnight, and although he negotiated to return $67 million to avoid the platform filing a lawsuit against him, Avraham Eisenberg proudly claimed on Twitter that his actions were legitimate public market behavior and a "high-profit trading strategy."
Subsequent Negotiations: Up to $47 million in Bug Bounty? Mango and the attacker reach consensus, returning some assets
However, these statements also became evidence for Brandon Racz's charges, proving that Mango's insolvency was indeed caused by Avraham Eisenberg's team.
Arrested in Puerto Rico
In the aforementioned documents, Brandon Racz found that Avraham Eisenberg seemed to have fled to Israel after the incident to avoid legal consequences for his attack, prompting the court to issue an arrest warrant.
According to another document signed by Assistant U.S. Attorney Thomas Burnett, Avraham Eisenberg was arrested in Puerto Rico yesterday, the 27th.
Note: Puerto Rico is a U.S. territory in the Caribbean region.
First Arrest for Manipulating DeFi Market
During the Mango incident, there were discussions in the community about whether this was illegal activity or just a calculated high-risk trading strategy.
However, the arrest of Avraham Eisenberg proves that even in the unregulated market of DeFi, law enforcement agencies are paying attention. Whether it is illegal remains to be seen in future court judgments, and this may also become the first legal precedent in DeFi related to market manipulation.