The Commodity Futures Trading Commission (CFTC), a US government agency that regulates futures and options markets has filed an independent complaint against Avraham Mayer Eisenberg, renowned as the Mango Markets exploiter.
The complaint stated that Eisenberg created a dubious scheme to inflate the price of swaps offered by Mango Markets, a decentralized crypto platform powered by the Solana blockchain. It was reported that Eisenberg who is currently in custody amassed over $100 million from Mango Markets in October 2022.
Eisenberg committed the crime of using a price manipulation technique to inflate the price of his swapped contract assets available on Mango’s platform with the aim of borrowing a sizable sum of digital assets he had no intention of paying back.
Eisenberg bought over 400 million MNGO through USDC swaps for approximately $19 million on the Mango platform. After successfully establishing his swaps, Eisenberg then purchased a large amount of MNGO tokens on Mango’s oracle with the aim of spiking the price artificially.
Eventually, he used the inflated price value of his MNGO-USDC swaps as collateral to borrow digital assets from Mango Markets. The hacker borrowed digital assets such as Bitcoin, Ether, and Tether valued at $114 million which comprises Mango’s total available liquidity.
Despite the allegations, Eisenberg described the entire incident as a highly profitable trading strategy. Eisenberg also carried out his proposal of returning $67 million in cryptos that he had illegally wiped out from the Mango oracle. He did this to prevent Mango Markets from freezing his funds and filing a criminal charge against him.
CFTC Under Pressure to Perform its Duties
The CFTC’s mission is to safeguard market participants and the public against fraud, manipulation, and other abusive practices in the sale of commodity and financial futures and options, and to promote open, competitive, and financially sound futures and options markets.
Before the collapse of the defunct FTX exchange, FTX was advocating in Congress for the CFTC to play a larger role in crypto markets, a cause that the CFTC and its commissioners supported. But right now, the CFTC is facing serious scrutiny in the wake of the FTX collapse.
The CFTC is fighting allegations of regulatory capture by wrongdoers as the former CEO of FTX, Sam Bankman-Fried faces criminal charges. Chairman Rostin Behnam is still defending the bill’s central thrust, but he and the other commissioners are eager to show that the regulator can hold crypto companies and other actors accountable.
