Mango Labs sues Avraham Eisenberg to Recover Supposedly Stolen Tokens

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Key takeaways:

  • The lawsuit is the fourth accusation or legal action brought against the Mango Markets exploiter for his assault on the DeFi protocol.
  • A trader was detained in Puerto Rico on suspicion of committing the crime.

The company behind the decentralized finance (DeFi) technology Mango Markets, Mango Labs, has filed its lawsuit against Avraham Eisenberg, the exploiter.

According to the January 25 filing in the Southern District of New York United States District Court, Einseberg used the site to steal millions of dollars of cryptocurrency in October 2022. It demands interest beginning at the moment of the attack in addition to $47 million in damages. In addition, it requested that the court declare an agreement between Eisenberg and Mango’s associated DAO “invalid and unenforceable.”

The deal was in response to a governance proposal Eisenberg filed, which urged the DAO to permit them to keep $47 million in exchange for Mango Markets agreeing not to file any criminal charges for depleting the DAO’s treasury. Eisenberg “was not engaged in lawful bargaining,” according to Mango Labs’ most recent complaint, adding:

“[Eisenberg] forced Mango DAO to enter into an unenforceable settlement agreement—under duress—purporting to release depositors’ claims against him and precluding them from pursuing a criminal investigation.”

On October 11, 2022, a hacker stole almost $116 million from Mango Markets’ bank account by altering the native MNGO token’s price oracle data, enabling them to take out loans with insufficient collateral.

Eisenberg then identified himself as the assailant. He asserted that the exploit was legitimate, open market activity, utilizing the protocol as planned and that it was a very profitable trading technique.

For his assault on the platform, Eisenberg was detained on December 27 in Puerto Rico and formally charged by the Federal Bureau of Investigation (FBI), including one count of commodities fraud and one count of commodities manipulation. Following the FBI’s accusations, the Commodity Futures Trading Commission (CFTC) charged Eisenberg with two counts of market manipulation on January 9.

Eisenberg suffered a further setback on January 20 when the Securities and Exchange Commission (SEC) accused him of breaking anti-fraud and market manipulation regulations.

According to the Mango Labs lawsuit, Eisenberg is a well-known internet personality with a history of targeting various cryptocurrency platforms and manipulating cryptocurrency prices. Eisenberg has attempted to use additional protocols; on November 22, he employed various complex techniques to take advantage of the DeFi protocol Aave.

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