crypto strategy

SEC accuses mango markets striker of manipulating ‘security’ price

The United States Securities and Exchange Commission (SEC) today accused Avraham Eisenberg, the Mango Markets striker, who claimed responsibility for the regime—with alleged fraud and market manipulation offenses related to its actions on the Solanabased on the decentralized exchange (DEX) in October 2022.

Eisenberg, an American citizen, was arrested in Puerto Rico in December and will be flown to New York to face the various criminal and civil charges filed against him. He allegedly manipulated the platform’s markets to steal around $116 million worth of cryptocurrency.

He boasted of the original attack on Twitter last October, describing it as a “highly profitable trading strategy”. Mango Markets had been temporarily rendered insolvent following the strategy, which it said it executed with a team of users. He also defended the regime during an appearance on the Unchained Podcast.

“I believe all of our actions were legal open market actions, using the protocol as designed,” Eisenberg tweeted in October, “even though the development team did not fully anticipate all consequences of setting the parameters as they are”.

Eisenberg was previously charged by the US Department of Justice in December, then by Commodity Trading and Futures Commission (CFTC) earlier this month.

The SEC says Eisenberg “violated numerous provisions of federal securities laws, including certain anti-fraud and anti-market manipulation provisions,” according to the filing.

Notably, the SEC alleges that the exchange’s MNGO governance token is a security –controversial branding which many crypto advocates would dispute. The SEC has stepped up its scrutiny of the crypto industry under current President Gary Genslerwho said he thinks almost all crypto assets are considered securities.

“As our action shows, the SEC remains committed to eradicating market manipulation, regardless of the type of security involved,” David Hirsch, head of the SEC’s crypto assets and cyber unit, said in a statement. Press.

Otherwise, the SEC’s charges are similar in scope to those filed by the Department of Justice (DoJ) and the CFTC. The DoJ accused Eisenberg of “market manipulation offensives,” including fraud and commodity manipulation. Meanwhile, the CFTC charged him with fraud and commodity manipulation, including violations of the Commodity Exchange Act, for his alleged orchestration of the October attack.

“As we claim, Eisenberg engaged in a manipulative and deceptive scheme to artificially inflate the price of the MNGO token, which was bought and sold as crypto asset security, in order to borrow and then withdraw nearly all the available assets of Mango Markets,” Hirsch explained.

Eisenberg allegedly tried to use his stolen MNGO governance tokens to manipulate decentralized finance (Challenge) of the platform CAD by voting for their own solution to return the tokens. The DAO, or Decentralized Autonomous Organization, which operates Mango Markets then offered Eisenberg a deal in which he could keep $47 million worth of crypto as a bug bounty if he returned the rest.

According to the SEC complaintEisenberg executed the original attack on the Mango Markets from Puerto Rico, fled the country for an undisclosed amount of time, and then returned to U.S. territory.

He attempted to execute a similar plan on the Aave protocol in November, but apparently lost millions of crypto dollars in the failed attempt.

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