Crypto Updates

CFTC Charges Mango Markets Manipulator with Fraud


The US Commodity Futures Trading Commission (CFTC) brought fraud and market manipulation charges against Avraham Eisenberg, who publicly admitted his role in draining over $110 million in digital assets from decentralized crypto exchange Mango Markets.

The lawsuit blamed Eisenberg for violating federal commodities law by using a “manipulative or deceptive device” to manipulate the MNGO tokens’ price through swaps. He was also accused of “manipulation of a swap.”

The regulator filed the charges only two weeks after the US Department of Justice arrested Eisenberg on similar fraud and market manipulation charges. The regulator also highlighted that it is the first enforcement action for fraud and manipulation of a decentralized platform through “oracle manipulation.”

“The CFTC will use all available enforcement tools to aggressively pursue fraud and manipulation regardless of the technology that is utilized,” said Gretchen Lowe, Acting Director of Enforcement at CFTC. “The CEA prohibits deception and swap manipulation, whether on a registered swap execution facility or on a decentralized blockchain-based trading platform.

Mango Markets, which runs on the Solana Blockchain, suffered the draining of over $110 million in cryptocurrencies on 11 October 2022. A few days Eisenberg Tweeted, admitting his role in draining Mango Markets, highlighting that it was a “highly profitable trading strategy” and was “legal.”

“Contrary to his purported belief that his actions were legal, in fact, they constituted blatant manipulation of spot prices and swaps,” the CFTC stated.

Mango Markets Manipulator Thought the Activities were ‘Legal’

In the lawsuit, the CFTC detailed that Eisenberg created two anonymous Mango Markets accounts for selling a large number of perpetual contracts of Mango’s crypto token MNGO from one of his accounts to the other, thus artificially inflating the price by 1,300 percent in under an hour. He then used the token as collateral to borrow…

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