Mango Markets Sues Avraham Eisenberg

Tom Carreras

Jan. 26, 2023

Eisenberg is now facing charges and lawsuits from four different entities, including the DOJ.

Cover by Mariia Kozyr

Key Takeaways

Mango Labs, the company behind decentralized perp exchange Mango Markets, has filed a lawsuit against Avraham Eisenberg.
The company seeks restitution of the $47 million Eisenberg allegedly siphoned from it, plus interest.
Eisenberg confessed to the exploit in October on Twitter.

Applied game theorist Avraham Eisenberg is getting sued by Mango Labs for exploiting their protocol in October. He is already facing charges from the Department of Justice, Commodity Futures Trading Commission, and Securities and Exchange Commission.

Mango Markets Retaliates

Avraham Eisenberg’s troubles keep getting worse.

Mango Labs, the company behind Solana-based decentralized perpetual exchange Mango Markets, filed a lawsuit against Avraham Eisenberg yesterday. It seeks a full restitution of the $47 million Eisenberg allegedly took from the protocol, as well as interest, starting from the day of the attack.

Mango Markets was exploited on October 11. The attacker took out a large position in the protocol’s perpetual futures contracts, thereby artificially inflating the price of the illiquid MNGO token from $0.3 to $0.91. They then used their significant unrealised profits as collateral to borrow the protocol’s assets, and drained over $114 million from its treasury. The attacker then offered to restitute $67 million to make protocol users whole, on the condition that Mango Markets would not seek criminal charges against them.

Shortly thereafter, Eisenberg publicly confessed having orchestrated the attack. “I was involved with a team that operated a highly profitable trading strategy last week,” he famously stated on Twitter, arguing that he had simply used Mango Markets in the way that it was designed, and hadn’t done anything illegal.

The Department of Justice did not see things the same way, however, and Eisenberg was arrested in Puerto Rico on December 27. The DOJ charged him with one count of commodities fraud and one count of commodities manipulation. The Commodity Futures Trading Commission and Securities and Exchange Commission have also filed their own charges against Eisenberg.

Eisenberg was recently denied bail by a Puerto Rican court: the judge ruled he constituted a flight risk due to his strong family ties outside the United States.

Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other crypto assets.

Disclaimer