(Bloomberg) — The U.S. Securities and Exchange Commission has sued Avraham Eisenberg, alleging he orchestrated an attack on crypto trading platform Mango Markets that allowed him to steal $116 million worth of digital assets.
“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 almost all the available assets of Mango Markets, which left the platform in deficit when the security’s price returned to its pre-manipulation level,” said David Hirsch, head of the Crypto Assets and Cyber Unit on Friday. the SEC, in a statement.
Eisenberg, 27, also faces parallel criminal charges, the SEC said. He was arrested and detained in Puerto Rico, charged by the SEC with violating the anti-fraud and market manipulation provisions of US securities laws. Prior to his arrest, Eisenberg had spoken openly on social media platforms about his “highly profitable business strategy”, which he claimed was legal.
The U.S. Commodity Futures Trading Commission filed a lawsuit earlier this month against Eisenberg for allegedly manipulating the price of swap contracts as part of the scam. The U.S. Attorney’s Office in Manhattan also charged Eisenberg in December with fraud and commodity manipulation.
Prosecutors say Eisenberg allegedly used two Mango Markets accounts he controlled to manipulate the price of Mango perpetual swaps, which are futures contracts that allow traders to keep their positions open. He then used his swaps to borrow and withdraw around $100 million of a number of tokens, which came from other investors’ deposits on Mango Markets.
Investigations are also ongoing into other securities law violations and other entities and individuals implicated in the alleged misconduct, the SEC said.
(Updates to include details of the alleged trading system.)
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