Work of Avraham Eisenberg- Ethical or Unethical?
Avraham Eisenberg is accused by the Securities and Exchange Commission (SEC) of orchestrating an attack on a platform for trading crypto assets known as Mango Markets. The attack was carried out by manipulating a so-called governance token known as the MNGO token, which was offered and sold in the market as a security. Ongoing investigations are being conducted into potential violations of other securities laws, as well as potential wrongdoing on the part of other entities and individuals.
Eisenberg, a citizen of the United States who is 27 years old and was arrested and detained at MDC Guaynabo, Puerto Rico, is currently waiting to be transported to appear before the Southern District of New York, where he is facing parallel criminal and civil charges, which were brought forth by the Department of Justice and the Commodities Futures Trading Commission (CFTC), respectively.
The complaint filed by the SEC alleges that beginning on October 11, 2022, Eisenberg participated in a scheme to steal approximately $116 million worth of crypto assets from the Mango Markets platform. This information comes from the SEC.
According to the allegations contained in the complaint, Eisenberg carried out the scheme while he was residing in Puerto Rico. It is alleged that he used one account that he controlled on Mango Markets to sell a significant quantity of perpetual futures in exchange for MNGO tokens, and that he used a different account on Mango Markets to purchase the same perpetual futures.
The complaint further alleges that Eisenberg then engaged in a series of large purchases of the lightly traded MNGO token with the intention of artificially raising the price of MNGO token relative to the value of the cryptocurrency asset USD Coin.
In accordance with another allegation made in the complaint, the price of MNGO perpetual futures on Mango Markets, including those owned by Eisenberg, rose as a direct consequence of the aforementioned transactions.
Furthermore as per the complaint, Eisenberg used the increased value of his MNGO perpetual futures position to borrow and withdraw approximately $116 million worth of various cryptocurrencies from Mango Markets. As a result, Eisenberg effectively drained all of the available assets from the Mango Markets platform.
According to the Chief of the Crypto Assets and Cyber Unit, David Hirsch, “as we allege, Eisenberg engaged in a manipulative and deceptive scheme to artificially inflate the price of the MNGO token, which was purchased and sold as a crypto asset security,” in order to borrow and then withdraw nearly all available assets from Mango Markets, which left the platform with a deficit when the security price returned to its level before the manipulation.
The Securities and Exchange Commission (SEC) “remains committed to rooting out market manipulation, regardless of the type of security involved,” as our action shows.
Eisenberg is accused of violating anti-fraud and market manipulation provisions of the securities laws in the complaint that was filed by the SEC in the federal district court in Manhattan. The SEC also seeks permanent injunctive relief, a conduct-based injunction, disgorgement with prejudgment interest, and civil penalties.
Kristin Pauley, a member of the SEC’s Crypto Assets and Cyber Unit, is in charge of the investigation that is currently being carried out. Thomas Bedkowski, who works for the Crypto Assets and Cyber Unit, offered some additional assistance to the investigation. Alyssa Qualls, who works in the Chicago Regional Office of the SEC, will be in charge of the litigation. Amy Flaherty Hartman, Jorge Tenreiro, Mr. Hirsch, and Carolyn Welshhans are in charge of supervising the situation at this time.
The Securities and Exchange Commission is grateful to the Federal Bureau of Investigation and the Commodity Futures Trading Commission for their assistance in this investigation.
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