California: The US Securities and Exchange Commission sued Avraham Eisenberg, alleging he orchestrated an attack on the crypto trading platform Mango Markets that allowed him to steal $116 million in digital assets.
“As we allege, Eisenberg engaged in a manipulative and deceptive scheme to artificially inflate the price of the MNGO token, which was purchased and sold as a crypto asset security, in order to borrow and then withdraw nearly all available assets from Mango Markets, which left the platform at a deficit when the security price returned to its pre-manipulation level,” David Hirsch, chief of the SEC’s Crypto Assets and Cyber Unit, said in an statement Friday.
Eisenberg, 27, also faces parallel criminal charges, the SEC said. He was arrested and detained in Puerto Rico, charged by the SEC for violating anti-fraud and market manipulation provisions of US securities laws. Before his arrest, Eisenberg was outspoken on social media platforms about his “highly profitable trading strategy,” which he claimed was legal.
The US Commodity Futures Trading Commission filed a lawsuit earlier this month against Eisenberg for allegedly manipulating the price of swaps contracts as part of the scam. The US Attorney’s Office in Manhattan also charged Eisenberg in December with commodities fraud and manipulation.
According to prosecutors, Eisenberg allegedly used two Mango Markets accounts he controlled to manipulate the price of Mango perpetual swaps, which are futures that allow traders to keep their positions open. He then used his swaps to borrow and withdraw about $100 million worth of a number of tokens, which came from the deposits of other investors on Mango Markets.
There are also ongoing investigations into other securities law violations and into other entities and persons involving in the alleged misconduct, the SEC said.