Federal Jury Finds Avraham Eisenberg Guilty of Commodities Fraud and Manipulation
Federal jurors in New York on Thursday found Avraham Eisenberg, 28, guilty of commodities fraud, commodities manipulation, and wire fraud for his actions on Oct. 11, 2022, when his trading boosted the price of futures contracts by 1,300% in 20 minutes. Sentencing was set for July 29.
Manipulating Prices and Exploiting the System
Eisenberg, a self-described “applied game theorist,” traded under a false identity and drove up the price of Mango’s token, MNGO, as well as contracts based on its relative value compared to a stablecoin called USDC, prosecutors said. Eisenberg then exploited a feature of the exchange that let him “borrow” against his holdings, withdrawing $110 million in cryptocurrencies that he had no intention of repaying, the US charged.
Prosecutors said Eisenberg “pumped” the price of MNGO tokens so he could pull off a fraud he planned for weeks against Mango Markets, a decentralized finance platform run by smart contracts.
Legal Defense and Prosecution
In his closing argument, Eisenberg’s attorney argued that his client executed a legal trading strategy permissible under the rules of the exchange. However, the prosecutor contended that the rules of the platform do not protect Eisenberg from prosecution for fraud and manipulation.
The case highlights the complexities of decentralized finance platforms and the legal implications of trading strategies within these systems.
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