Mango Markets Exploiter Returns $67M of Drained Funds, Defends ‘Exploit’ as ‘Legal’

UTC by Tolu Ajiboye · 3 min read
Mango Markets Exploiter Returns $67M of Drained Funds, Defends ‘Exploit’ as ‘Legal’
Photo: Unsplash

Avraham Eisenberg, who recently revealed himself as the Mango Markets exploiter, calls his strategy a “highly profitable” trading one.

Mango Markets exploiter, Avraham Eisenberg, returned $67 million to the Solana-based DeFi hub on Saturday and defended his actions. Eisenberg is reportedly part of a group that stole $114 million from the decentralized crypto exchange Mango Markets last week. Although some in the crypto space have described the draining as an exploit, Eisenberg does not believe so. According to him, his actions were “legal” and the brainwork of a “highly profitable trading strategy”. In a Twitter thread, Eisenberg sought to elaborate on the recent events saying:

“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.”

“Unfortunately, the exchange this took place on, Mango Markets, became insolvent as a result, with the insurance fund being insufficient to cover all liquidations. This led to other users being unable to access their funds,” added he.

Eisenberg also revealed that he had made remedial efforts, including negotiating a settlement agreement with the insurance fund. This is so that all users can become whole as soon as possible, with Mango Markets also becoming recapitalized. Expounding further on his remedial strategy, the self-professed Mango Markets exploiter drew comparisons with the concept of auto deleveraging on exchanges such as Binance and Bitmex. Auto deleveraging seeks to recoup some profits from profitable traders to ensure the protection of all users’ funds.

In conclusion, Eisenberg explains that once the Mango team finishes processing, users will have access to their deposits in full without losing funds.

Eisenberg did not reveal the identity of his other team members.

Mango DAO to Conduct ‘Multiple Votes Next Week’ Regarding Sharing of Repatriated Funds

Following the $67 million fund repatriation, the Mango DAO seeks to vote next week on how to divide and disburse the funds. However, the decentralized autonomous organization did not provide a given timeline for the refunds. It only hinted at multiple incoming DAO votes. Weighing in on the development, Daffy Durairaj, co-founder of Mango Markets, explained in the project’s Discord:

“Everything has to go through DAO proposals. My personal goal is to make depositors whole and that’s what I’ll aim towards. But the mix of tokens and positions everyone had might be different”

Mango Markets is a decentralized exchange on the Solana (SOL) blockchain. In addition, the protocol has the MNGO governance token, with a market capitalization of just over $26.8 million.

How Mango Markets Exploiter Drained Funds from Decentralized Exchange

Early last week, Eisenberg funded an account with the USDC stablecoin. He later took an “outsized position” on the Mango token perpetual futures market (MNGO-PERP), triggering a massive surge in MNGO price. MNGO rose by as much as 10x on a number of external exchanges, which Mango’s price oracles referenced for the MNGO-PERP price. The increased unrealized profit implied that the same user could borrow and withdraw millions in several crypto and stablecoins.

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Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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