Mango Markets Hacker Arrested in Puerto Rico to Face Fraud Charges

UTC by Benjamin Godfrey · 3 min read
Mango Markets Hacker Arrested in Puerto Rico to Face Fraud Charges
Photo: Unsplash

Eisenberg was arrested by the DOJ because the regulator believes no act of market manipulation can be justified by law.

Authorities from the United States have arrested Avraham Eisenberg, the alleged hacker of the Mango Markets Decentralized Exchange (DEX). According to a report by The Block, Federal prosecutors from the Justice Department arrested Eisenberg in Puerto Rico and he will be made to face charges in the US District Court for the Southern District of New York.

This year was particularly a year with numerous cyberattacks, many of which the perpetrators were never caught. The exploit of Mango Markets by Eisenberg saw him drain over $114 million from the protocol in October as Coinspeaker reported at the time. It was believed that Eisenberg was not working alone, however, there have been no words from his team following his arrest.

To carry out the exploit, Eisenberg purchased a large amount of MNGO, the native token of the Solana-based DEX. This purchase move contributed to the inflation of the price of the coin, a situation prosecutors are calling a market manipulation event. When the coin’s price shot up, Eisenberg then borrowed more valuable and stable cryptocurrencies on the platform without the intention of paying back.

When MNGO retraced its growth, Eisenberg’s debts went into a somewhat positive deficit for him but detrimental to the platform as there was no way he could cover the shortfall. In the usual spirit of ethical hacking, Eisenberg identified himself as the attacker and negotiation ensued between him and the protocol.

An agreement was reached for him to take a bounty worth $47 million from the stolen funds and he voluntarily returned the remaining $67 million to the protocol. In the decentralized world, such transactions are often applauded and the hackers are celebrated as though they are contributing to the security advances of the protocol.

Federal Prosecutors See the Mango Markets Exploit Differently

Eisenberg was arrested by the DOJ because the regulator believes no act of market manipulation can be justified by law. The authorities chose to let the natural cause of the law to prevail despite the proponents of Decentralized Finance (DeFi) and its associated innovations already defining their own rules.

Eisenberg is being charged with commodities fraud and commodities manipulation according to the charges filed against him.

Each case in the emerging world of cryptocurrency is often unique and has almost no precedents. This Mango Markets exploit case is one of such as Eisenberg’s defense may focus on the fact that he was acting as a Whitehack and that he has settled with the developers and community of the DEX.

There are several instances of attacks that are even higher in profile than this and one of such is the Poly Network exploits back in 2021. As reported by Coinspeaker at the time, more than $600 million was looted from the protocol but the hacker returned all the stolen funds in a rare productive negotiation with the protocol’s developers.

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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