NEW YORK, Dec 27 (Reuters) – U.S. prosecutors have filed felony costs of commodities fraud and manipulation in opposition to a person accused of attempting to steal about $110 million in October by rigging the Mango Markets cryptocurrency trade.
In accordance with a criticism made public on Tuesday in Manhattan federal court docket, Avraham Eisenberg’s trades in futures associated to Mango’s crypto token MNGO enabled him to withdraw $110 million in cryptocurrencies from different traders’ deposits, with no obvious intention to repay the funds.
Eisenberg was arrested on Monday evening in Puerto Rico, U.S. Lawyer Damian Williams in Manhattan mentioned in a court docket submitting. It was unclear whether or not Eisenberg has a lawyer.
Mango is a decentralized cryptocurrency trade run by Mango DAO that lets traders lend, borrow, swap, and use leverage to commerce cryptocurrency property.
The Dec. 23 criticism signed by FBI Particular Agent Brandon Racz mentioned Eisenberg on Oct. 11 used two accounts to concurrently purchase and promote futures primarily based on the relative values of MNGO and the stablecoin USD Coin (USDC).
By being on each side of the transaction, Eisenberg artificially inflated the value of MNGO relative to USDC, permitting him to borrow after which withdraw $110 million of various cryptocurrencies, the criticism mentioned.
Mango quickly started negotiations with Eisenberg and reached a settlement to recoup $67 million.
“All mango depositors will probably be made complete,” with token holders who vote for the settlement agreeing to not “pursue any felony investigations or freezing of funds as soon as the tokens are despatched again,” a community post mentioned on the time.
Eisenberg claimed duty for the buying and selling, the criticism mentioned, and tweeted on Oct. 15 that “the trade this came about on, Mango Markets, grew to become bancrupt.”
He additionally tweeted: “I consider all of our actions have been authorized open market actions, utilizing the protocol as designed, even when the event workforce didn’t totally anticipate all the results of setting parameters the way in which they’re.”
Mango couldn’t instantly be reached for remark.
The case is U.S. v. Eisenberg, U.S. District Courtroom, Southern District of New York, No. 22-mj-10337.
Reporting by Jonathan Stempel in New York; Further reporting by Hannah Lang; Enhancing by Rosalba O’Brien and David Gregorio
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