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CFTC sues trader over $114M Mango Markets exploit
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CFTC sues trader over $114M Mango Markets exploit

Following claims his actions were "legal"

Jan 12
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CFTC sues trader over $114M Mango Markets exploit
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The U.S. Commodity Futures Trading Commission (CFTC) is investigating Mango Markets exploiter Avraham Eisenberg over his role in extracting $114 million from the decentralized finance platform.

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In a lawsuit dated Monday, the CFTC claims that Eisenberg “engaged in a manipulative and deceptive scheme to artificially inflate the price of swaps offered by Mango Markets […] culminating in the misappropriation of over $100 million from the platform” in October.

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According to the filing, Eisenberg “purchased over 400 million MNGO-USDC Swaps on Mango Markets with a position size of approximately $19 million.” He then bought "large quantities" of Mango’s MNGO coin on three Oracle exchanges.

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This caused MNGO's price to jump from $0.04 to $0.54 and allowed Eisenberg to "borrow"—or drain—the protocol of all available liquidity. This included $114 million of Bitcoin, Ether, and Tether. As a result, Mango Markets was left “holding a mostly empty bag.”

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After returning $67 million to the platform, Eisenberg revealed he was a part of a group that simply "operated a highly profitable trading strategy.”

Twitter avatar for @avi_eisen
Avraham Eisenberg @avi_eisen
I believe all of our actions were legal open market actions, using the protocol as designed, even if the development team did not fully anticipate all the consequences of setting parameters the way they are.
4:48 PM ∙ Oct 15, 2022
302Likes8Retweets

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The U.S. Justice Department arrested Eisenberg on December 27th, however, and charged him with one count of commodities fraud and one count of commodities manipulation.

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