The Mango Markets hacker previously referred to his attack on the cryptocurrency exchange as “legal open market actions.”
The crypto trader responsible for the $110 million Mango Markets hack has been arrested in Puerto Rico and charged with market manipulation and fraud.
The Federal Bureau of Investigation (FBI) charged Avraham Eisenberg with one count of commodities fraud and one count of commodities manipulation in relation to his exploit of Mango Markets, according to a previously sealed complaint filed with the Southern District of New York and made public on December 27.
Eisenberg’s Oct. 11 Mango Markets exploit worked by artificially inflating the price of the platform’s native token, MNGO, relative to USD. Coin Eisenberg and his team then made “massive loans” against its inflated collateral, depleting Mango’s treasury of approximately $110 million in various cryptocurrencies.
On Oct. 12, Mango began negotiations with Eisenberg for the return of the funds.
Mango Markets confirmed on Oct. 15 that $67 million in various crypto assets had been returned.
Eisenberg then publicly admitted to using the cryptocurrency exchange, claiming to be part of a team that “operated a highly profitable trading strategy” and that he believed all of his actions were “legal open market actions.”
According to the FBI’s recent complaint, Eisenberg’s actions constituted both fraud and market manipulation because he “willfully and knowingly” participated in a scheme involving the “intentional and artificial manipulation” of the price of perpetual futures on Mango Markets.
This eventually allowed him to withdraw $110 million in cryptocurrencies, the majority of which came from deposits made by other Mango Markets investors.
“Other investors with deposits on Mango Markets lost much, or all, of those deposits as a result of [Eisenberg’s] withdrawals,” explained FBI special agent Brandon Racz in the Dec. 23 complaint.
Eisenberg may have known his actions were illegal as well, according to Racz, because Eisenberg flew from the United States to Israel the day after the Mango Markets heist.
“Based on the timing of the flight, it appears that the travel was an attempt to avoid arrest by law enforcement in the immediate aftermath of the Market Manipulation Scheme,” he said.
According to a filing from the United States Attorney’s Office for the Southern District of New York, Eisenberg was arrested on December 26 in Puerto Rico.
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