Crypto trader searched web for 'fraud' before $110 million haul

A trader accused of stealing $110 million from the Mango Markets cryptocurrency exchange searched the web for terms like "elements of fraud" and "statute of limitations market manipulation," evidence presented at his criminal trial showed.

Prosecutors allege Avraham Eisenberg manipulated Mango Markets futures contracts on Oct. 11, 2022 "- when he boosted the price of swaps by 1,300 per cent in 20 minutes "- and then "borrowed" against those inflated contracts using anonymous accounts before fleeing Puerto Rico for Israel.

Before and after his alleged theft, Eisenberg, 28, searched the web for terms like "market manipulation criminal" and "FBI surveillance," as well as information about extradition from Israel, according to documents shown Friday to jurors in New York federal court. He was arrested on Dec. 26, 2022, after flying from Tel Aviv to Puerto Rico.

Eisenberg also had tweeted about the arrest of Glen Point Capital co-founder Neil Phillips on charges of manipulating the foreign-exchange market, documents showed. Phillips was convicted in September.

Prosecutors, who began presenting evidence Tuesday and rested their case Friday, showed jurors Eisenberg's web history to suggest he knew he was breaking the law. Defense attorneys will offer their version of the case Monday, and closing arguments are expected on Tuesday.

Eisenberg is accused of commodities fraud, commodities manipulation and wire fraud. The US alleges he deceptively used two anonymous accounts at Mango Markets to buy and sell himself futures contracts. Those contracts were based on the relative value of Mango's token, known as MNGO, and a stablecoin called USDC.

Prosecutors also showed jurors an Eisenberg chat in which he said MNGO "looks primed for a pump."

Jurors also heard from a Mango Markets investor, Oliver Tonkin, the chief executive officer of BCB Group, a payment service provider for crypto. Tonkin had moved 122,628 USDC stablecoins to the site, and couldn't withdraw them after Eisenberg's actions, he testified.

"Obviously, that puts at risk my funds, if somebody can manipulate that price," Tonkin testified. He said he was able to access his funds about two weeks later.

Mango Markets is run by smart contracts and overseen by a decentralized autonomous organization, or DAO, that lets people borrow, lend and trade cryptocurrencies. Eisenberg agreed to repay $67 million to the Mango DAO in exchange for it not pursuing any criminal investigation against him, prosecutors say. The DAO's treasury also repaid investors, authorities say.

The criminal case is US v. Eisenberg, 23-cr-00010, US District Court, Southern District of New York (Manhattan).