• The US CFTC has filed charges against Avraham Eisenberg for allegedly manipulating and deceiving Mango Markets to borrow digital assets worth over $100 million.
• The CFTC believes Eisenberg artificially inflated the value of his swap contract holdings on Mango Markets to borrow the assets without intending to repay them.
• In his defense, Eisenberg claimed to have been involved in a highly profitable trading strategy that returned over $67 million to the Solana-based DeFi.
The United States Commodity Futures Trading Commission (CFTC) has recently filed charges against Avraham Eisenberg in the southern district of New York, accusing him of engaging in a manipulative and deceptive scheme to artificially inflate the price of swaps offered by Mango Markets between October 11, 2022, and October 15, 2022. According to the CFTC, Eisenberg exploited the decentralized crypto exchange Mango Markets to borrow a significant amount of digital assets worth over $100 million that he had no intention to repay.
Eisenberg attempted to defend himself by noting that he was involved with a team that operated a highly profitable trading strategy, which eventually returned over $67 million to the Solana-based DeFi. He claimed that all their actions were legal open market actions, using the protocol as designed, even if the development team did not fully anticipate all the consequences of setting parameters the way they did.
The CFTC has accused Eisenberg of violating the Commodity Exchange Act and several other regulations, including the prohibition against offering false or misleading information, price manipulation, and market manipulation. The CFTC is seeking civil monetary penalties and other relief, including disgorgement of the benefits Eisenberg received from his unlawful activities.
The case is expected to be closely watched by the crypto community, as it could set a powerful precedent for how decentralized exchanges should be regulated. It is also a reminder that traders should always be aware of the risks of trading, and take steps to ensure they are taking the right steps to protect themselves and their investments.