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Jonathan Stempel
NEW YORK (Reuters) – U.S. prosecutors in October filed charges of commodity fraud and manipulation after attempting to steal about $110 million by manipulating the Mango Market cryptocurrency exchange.
Abraham Eisenberg is accused of withdrawing $110 million in cryptocurrency from other investors’ deposits through futures trading related to Mango’s crypto token MNGO, according to a complaint released Tuesday in Manhattan federal court. was able to do so, but apparently had no intention of repaying the funds.
Eisenberg was not immediately available for comment, and it’s unclear if he has an attorney.
Mango is a decentralized cryptocurrency exchange operated by Mango DAO that allows investors to lend, borrow and exchange crypto assets and trade crypto assets using leverage.
According to the complaint signed by FBI Special Agent Brandon Racz on Dec. 23, Eisenberg used two accounts on Oct. 11 to steal money based on the relative values ​​of MNGOs and the stablecoin USD Coin (USDC). I was buying and selling futures at the same time.
By being on both sides of the deal, Eisenberg was able to artificially inflate MNGO prices against USDC and borrow and withdraw $110 million in various cryptocurrencies, the complaint says.
Mango immediately entered into negotiations with Eisenberg and reached a settlement that would recoup $67 million.
Token holders who voted in favor of the settlement said that by agreeing “no criminal investigations or freezes of funds after the tokens are returned,” “all mango depositors will be complete.” A community post at the time said:
According to the complaint, Eisenberg claimed responsibility for the transaction, tweeting on Oct. 15 that “Mango Market, the exchange where this took place, has become insolvent.”
He added, “Even if the development team didn’t fully anticipate all the consequences of setting the parameters as they were, all of our actions were legitimate open market actions using the protocol as designed.” I believe it is.”
Mango was not available for comment. The U.S. Attorney’s Office in Manhattan, Damian Williams, did not immediately respond to a request for comment.
The case is US v. Eisenberg, United States District Court, Southern District of New York, No. 22-mj-10337. (Reporting by Jonathan Stempel, New York; additional reporting by Hannah Lang; editing by Rosalba O’Brien)
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