Eight years for DeFi manipulation: how Abraham Eisenberg deprived Mango Markets of $110 million
Date: 2025-04-24 Author: Oliver Abernathy Categories: BUSINESS
In New York, prosecutors have asked for Abraham Eisenberg to be sentenced to 6.5 to 8 years in prison for actions that led to the withdrawal of $110 million from the decentralized platform Mango Markets. The crime occurred in 2022 and was not accompanied by a traditional hack - Eisenberg exploited a vulnerability in the economic model of the protocol.
Eisenberg pulled off a scheme to manipulate the price of the MNGO token: he made deals between two of his own accounts, artificially increasing trading volumes and inflating the price of the asset. This allowed him to increase the value of the collateral, on the basis of which he took out large loans in other cryptocurrencies. He then transferred the withdrawn funds to external wallets.
Immediately after the operation, Eisenberg did not go into hiding - on the contrary, he publicly stated on social media that his actions were a "high-yield trading strategy" and did not violate the law. This phrase quickly spread throughout the crypto community as a meme.
He later voluntarily returned $67 million. However, Mango Markets is trying to get the remaining $43 million back through the courts, despite the fact that the platform's community had previously voted for Eisenberg to keep this amount.
In the spring of 2024, the court found Eisenberg guilty of fraud. Although he denied the charges for a long time, the prosecutor's office said that his escape confirmed his knowledge of the illegality of his actions. Shortly after withdrawing the funds, he left Puerto Rico for Israel. Upon his return in December 2022, he was detained by US law enforcement officers. Since then, he has been in custody, as the court considered that Eisenberg may try to escape again.
The final decision on the sentence will be made on May 1. Eisenberg is 29 years old, and this could become a precedent case for the entire DeFi sector.
In addition, the US Department of Justice announced another high-profile sentence: 62-year-old Long Island resident Hugh Austin received 18 years in prison for cryptocurrency fraud. Together with his son, they defrauded investors of $12 million, promising investments in cryptocurrency. Austin's son was previously sentenced to four years in prison.
