A Puerto Rican man is scheduled to make his initial appearance this afternoon in Manhattan federal court to face charges of commodity fraud, commodity market manipulation, and wire fraud in connection with the manipulation of decentralized cryptocurrency exchange Mango Markets. .
According to court documents, Avraham Eisenberg, 27, engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from the Mango Markets cryptocurrency exchange and its clients and accomplished this goal by artificially manipulating the price of certain perpetual futures contracts. He previously was arrested on December 26, 2022 in San Juan, Puerto Rico, pursuant to a criminal complaint and his arrest was ordered.
โThe exploitation of decentralized finance platforms is the new frontier of old-school financial crime in which criminals abuse emerging technologies for their own personal gain,โ said Assistant Attorney General Kenneth A. Polite, Jr. of the Criminal Division of the Department of Justice. "With this prosecution, the Criminal Division is sending the message that regardless of the mechanism used to commit fraud and market manipulation, we will work to hold those responsible accountable."
Mango Markets is a decentralized cryptocurrency exchange that allows investors to, among other things, buy and borrow cryptocurrency and cryptocurrency-related financial products. Mango Markets is run by the Mango Decentralized Autonomous Organization (Mango DAO). Mango DAO has its own crypto token called MNGO, which investors can buy and sell. Holders of the MNGO token can vote on changes to the Mango Markets platform and issues related to the governance of the Mango DAO.
โAs alleged, Avraham Eisenberg rigged the Mango Markets cryptocurrency exchange to obtain more than $100 million in illicit profits for himself,โ said U.S. Attorney Damian Williams for the Southern District of New York. โThrough his scheme, Eisenberg left others with the bag. Market manipulation is illegal in all its forms, and this office is committed to prosecuting such schemes wherever they occur, including in cryptocurrency markets."
โDefendant is alleged to have executed a scheme through which he fraudulently acquired more than $100 million worth of cryptocurrency,โ said Deputy Director in Charge Michael J. Driscoll of the FBI's New York Field Office. "The FBI is dedicated to safeguarding the integrity of all financial markets and will ensure that anyone who wishes to exploit one is held accountable to the criminal justice system."
Eisenberg is charged in the Southern District of New York with one count of commodity fraud, one count of commodity tampering and one count of wire fraud. If convicted, he faces a maximum sentence of 10 years in prison for the commodity fraud charge, a maximum sentence of 10 years in prison for the commodity tampering charge, and a maximum sentence of 20 years in prison for the wire fraud charge.
The FBI is investigating the case with the assistance of IRS Homeland Security Investigations and Criminal Investigation. The Commodity Futures Trading Commission and the Securities and Exchange Commission initiated parallel civil proceedings.
National Cryptocurrency Enforcement Team (NCET) trial attorney Jessica Peck and Assistant US Attorneys Thomas Burnett and Noah Solowiejczyk for the Southern District of New York are prosecuting the case.
The NCET was established to combat the increasing illicit use of cryptocurrencies and digital assets. Under the Criminal Division, the NCET conducts and supports investigations into individuals and entities enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and flipping services and infrastructure providers. NCET also sets strategic priorities regarding digital asset technologies, identifies areas for increased investigative and prosecution focus, and leads the department's efforts to collaborate with domestic and foreign government agencies, as well as the private sector to investigate and aggressively prosecute crimes involving cryptocurrency and digital assets. .
An accusation is just an accusation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
