Trader Convicted of $110 Million Crypto Fraud in US Trial
The recent conviction of a trader in the first US trial involving criminal charges tied to cryptocurrency manipulation has sent shockwaves through the financial world. Avraham Eisenberg, 28, was found guilty of commodities fraud, commodities manipulation, and wire fraud for his actions on Oct. 11, 2022, when he exploited Mango Markets rules to steal $110 million from the exchange.
Eisenberg, who described himself as an “applied game theorist,” traded under a false identity and drove up the price of Mango’s token, MNGO, as well as contracts based on its relative value compared to a stablecoin called USDC. He then took advantage of a feature on the exchange to borrow against his holdings, withdrawing the massive sum of cryptocurrencies that he had no intention of repaying.
Prosecutors revealed that Eisenberg had meticulously planned the fraud for weeks, manipulating the price of MNGO tokens to deceive the system into giving him money. Despite his attorney’s claims that his actions were legal and within the rules of the exchange, the jury found him guilty on all charges.
After his illicit trades, Eisenberg fled to Israel but was eventually arrested upon his return to Puerto Rico. He has been in jail ever since, with sentencing scheduled for July 29. The case has raised questions about the regulation and oversight of decentralized finance platforms like Mango Markets, which operate through smart contracts and decentralized autonomous organizations.
The outcome of this trial serves as a warning to others in the cryptocurrency space that fraudulent activities will not go unpunished. As the world of digital assets continues to evolve, it is crucial for investors and traders to exercise caution and due diligence to avoid falling victim to similar schemes.
