A federal jury has convicted crypto trader Avraham Eisenberg of fraud and market manipulation.
The allegations against Eisenberg arose from his misuse of Mango Markets, a Decentralized Finance (DeFi) platform established on the Solana blockchain.
Eisenberg Convicted for Market Manipulation
In a Manhattan federal court, a jury reached a verdict finding Eisenberg, aged 28, responsible for allegations of commodities deceit, manipulation, and wire fraud.
According to Nicole M. Argentieri, the Chief of the Justice Department’s Criminal Division, Abraham Eisenberg orchestrated a deceitful cryptocurrency trading scam, resulting in a substantial loss of $110 million for the exchange and its investors.
The US Department of Justice files its initial criminal charge against cryptocurrency market manipulation.
Mango Markets is a decentralized system run by Mango DAO where users can lend, borrow, exchange, and conduct leveraged trading of cryptocurrencies.
At the court hearing, the prosecution team shared proof that Eisenberg employed a deceitful stock trading technique on the 11th of October, 2022.
According to reports, Eisenberg allegedly employed two different accounts to place coordinated buy and sell orders for futures contracts connected to Mango’s token, MNGO, and USD Coin at the same time. These questionable trades artificially boosted his contract values by an impressive 1,300% within a mere 20-minute span.
After increasing the value of his investments artificially, Eisenberg was able to secure a loan using these inflated assets and withdrew around $110 million in different cryptocurrencies.
Although Eisenberg asserted that his trading activities were legal and clear, the jury reached a verdict in under a day. Disappointedly, Eisenberg’s lawyer, Brian Klein, declared intentions to file post-trial motions on behalf of his client.
Eisenberg has consented to return $67 million, but only if other token owners forgo initiating lawsuits against him or seizing his assets.
Eisenberg in Custody Awaiting Sentencing
After being apprehended on December 26, 2022, in San Juan, Puerto Rico – the place he called home – Eisenberg continues to be detained based on the allegation that he might try to flee before his trial.
Timothy Langan, the Executive Assistant Director of the FBI’s Criminal, Cyber, Response, and Services Branch, warned that individuals involved in fraudulent activities, be it in the cryptocurrency market or through other means of manipulation, will face consequences for their unlawful profits.
Additionally, he highlighted the firm resolve of the organization in bringing those responsible for deceitful acts to justice.
The sentencing for Eisenberg’s offense is set for July 29. If found guilty, he faces a maximum sentence of 10 years in prison for committing commodities fraud and manipulation, and up to 20 years for engaging in wire fraud.
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2024-04-19 18:30