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CFTC Sues Trader Over Alleged $114 Million Mango Markets Crypto Swaps Scam

Soegeefx AppsCrypto MarketCFTC Sues Trader Over Alleged $114 Million Mango Markets Crypto Swaps Scam

The US Commodity Futures Trading Commission filed a lawsuit against crypto trader Avraham eisenbergfor allegedly manipulating the price of swaps contracts as part of a scam to steal $114 million.

Eisenberg perpetrated a “a manipulative and deceptive scheme” in October to inflate the price of swaps offered by decentralized digital-asset exchange Mango Markets, culminating in the misappropriation of the funds, the regulator said in a complaint Monday.

Eisenberg last month was arrested in Puerto Rico and charged with fraud by prosecutors in New York over the exploit. At one point it looked like he was walking away with about $50 million worth of digital assets after the attack. He defendedhis actions as legal in the aftermath of the incident.

Eisenberg allegedly used two Mango Markets accounts he controlled to manipulate the price of perpetual swaps, pushing up their price by 1,300% in a matter of minutes.

He used the swaps as collateral to borrow and withdraw about $114 million worth of cryptocurrencies, which came from the deposits of other investors on the exchange. The CFTC is seeking civil monetary penalties and trading bans.

The Mango Markets incident was one of a number of hacks to hit decentralized finance over the past year, adding to a period of ignominy for crypto amid a $2 trillion rout in digital assets and the arrest of Sam Bankman-Fried over the implosion of the FTX exchange.

Source: Bloomberg

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