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Mango Markets Hacker Found Guilty, Faces 20 Years in Prison: Reuters

Avraham Eisenberg, the individual behind the Mango Markets hack, was convicted on Thursday in a federal court in Manhattan for masterminding a fraud that led to the theft of around $110 million from the DeFi platform based on Solana.

The prosecution contended that Eisenberg carried out an intricate manipulation of the platform, resulting in significant financial damage. Since his arrest in January 2023, Eisenberg has been detained and could receive up to 20 years in prison if sentenced to the maximum penalty.

Eisenberg Found Guilty of Commodities Fraud and Manipulation in Mango Markets Case

As Reuters reported, on April 18, a federal jury in New York convicted Avraham Eisenberg on charges of commodities fraud, commodities manipulation, and wire fraud related to his activities on Mango Markets, which involved tampering with its native token, $MNGO.

The verdict came after several hours of deliberation following the closing arguments on April 17. The trial, which started on April 9, spanned just over a week. Eisenberg had been arrested in December 2022 in Puerto Rico.

During the final arguments, Eisenberg’s defense maintained that he had executed a “successful and legal trading strategy,” which netted about $110 million. However, the prosecution countered that Eisenberg had to resort to deception to extract funds from Mango Markets, indicating a clear intent to defraud.

Eisenberg’s attorney, Brian Klein, stated that his client strictly followed the guidelines set by Mango Markets’ smart contracts and withdrew his funds without taking any loans.

Furthermore, after the exploit, Eisenberg returned cryptocurrency valued at $67 million to Mango Markets, maintaining that he had legally acquired the rest of the funds.

Klein expressed his disappointment with the jury’s decision but confirmed their resolve to persist in defending their client. “We’re obviously disappointed, but we will keep fighting for our client,” he said, signaling intentions to pursue post-trial motions.

Hacker Convicted in $110 Million Mango Markets Exploit Case

On October 11, 2022, Mango Markets fell victim to a security breach where around $110 million was siphoned from its treasury.

Following the incident, Avraham Eisenberg identified himself as the orchestrator, describing the exploit as a “highly profitable trading strategy” that he claimed was executed within the legal frameworks and intended design of the protocol.

Prosecutors highlighted that Eisenberg used two accounts to carry out manipulative trades involving futures contracts linked to Mango’s token MNGO and the stablecoin USD Coin. These trades reportedly surged the value of his contracts by 1,300% in just 20 minutes, enabling him to leverage his holdings and extract $110 million in various cryptocurrencies.

In a subsequent agreement, Eisenberg consented to return $67 million on the condition that other token holders would not initiate legal actions or freeze his assets.

Eisenberg was apprehended on December 26, 2022, in San Juan, Puerto Rico, where he was living. He has been held in custody ever since, with prosecutors considering him a flight risk.

On January 9, the Commodity Futures Trading Commission (CFTC) added to the FBI’s existing charges against Avraham Eisenberg by filing two counts of market manipulation.

The legal troubles for Eisenberg continued to escalate as the U.S. Securities and Exchange Commission (SEC) brought forward charges on January 20, accusing him of violating anti-fraud and market manipulation provisions under U.S. securities laws.

Mango Labs has also filed a lawsuit against Eisenberg, branding him as a “notorious online personality” who has repeatedly targeted various cryptocurrency platforms and manipulated the markets.

Eisenberg’s sentencing is set for July 29 and could lead to a maximum of 20 years in prison, though the expected sentence might be less severe.

This development closely follows the recent 25-year prison sentence handed to Sam Bankman-Fried, the founder of the collapsed FTX cryptocurrency exchange, who was convicted of misappropriating $8 billion from customers. These cases underscore the growing regulatory scrutiny and enforcement actions in the cryptocurrency sector.

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