Avraham “Avi” Eisenberg, who is accused of orchestrating a $110 million scam on the Solana decentralized exchange Mango Markets, has been likened to a con artist selling fake diamond rings, according to prosecutors. The Assistant Attorney, Tian Huang, argued in a Manhattan federal court that Eisenberg’s actions on October 11, 2022, amounted to fraud and market manipulation. Huang stated that Eisenberg inflated the price of cryptocurrency by 1,000% in just 20 minutes and deceived Mango Markets into believing he owned a significant amount of cryptocurrency. Huang further alleged that Eisenberg “borrowed” over $110 million of cryptocurrency, but in reality, he was stealing it. Eisenberg’s lawyer, Sanford Talkin, countered these claims, asserting that his client operated a profitable trading strategy within the bounds of the law. Talkin explained that Eisenberg risked $13 million of his own funds and emphasized that the trade was not a sure bet. He argued that the nature of blockchain transactions allowed anyone to have taken the other side of the trade and that Eisenberg executed a successful trade. In October 2022, Eisenberg artificially inflated the value of Mango Markets’ native token, MNGO, relative to USD Coin (USDC). He then took out loans against the inflated MNGO price, resulting in a loss of approximately $110 million worth of various cryptocurrencies from Mango Markets’ treasury. While some of the funds were later returned, the Mango Markets team sued Eisenberg for $47 million in damages plus interest. Crypto lawyer Gabriel Shapiro emphasized the importance of the final ruling on Eisenberg’s case for the crypto industry’s future. Shapiro supported the charge of market manipulation against Eisenberg but criticized the claim that he breached a loan agreement implied in his use of the protocol, stating that this is not how decentralized finance (DeFi) works. Shapiro drew a comparison to a scenario where a user gets liquidated on Aave due to falling collateral prices, arguing against the ability of AaveDAO to sue the user for the debt.
Prosecutor likens Mango Markets heist to a deceptive fake diamond ring scheme