A cryptocurrency trader accused of committing a fraud of close to 110 million dollars, was arrested in the last hours in Puerto Rico, according to court documents.
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The self-described “Gaming theorist” admitted his role “in draining the Mango Markets treasury shortly after the incident, in mid-October, and could now be the first US resident to face charges for his role in the manipulation. of a decentralized finance (DeFi) trading platform,” Coindesk said.
According to the information, “Avraham Eisenberg faces charges of fraud and manipulation of raw materials, according to a file unsealed Tuesday. The charges could generate penalties ranging from fines to prison terms.”
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“A statement signed by FBI Special Agent Brandon Racz alleges that Eisenberg deliberately and knowingly rigged the sale of a commodity, specifically futures contracts on Mango Markets,” Coindesk said.
“Eisenberg engaged in a scheme involving the intentional and artificial manipulation of the price of perpetual futures contracts on a cryptocurrency exchange called Mango Markets, and other manipulative and deceptive devices and artifices,” it stated.
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Eisenberg was arrested Monday night in Puerto Rico, said a second filing signed by Assistant US Attorney Thomas Burnett.
According to the released complaint, “Eisenberg rigged the price of perpetual contracts (a type of futures contract popular in cryptocurrency markets) for Mango Markets’ native MNGO token.”
Furthermore, it “sold massive amounts of MNGO perpetual contracts to itself, thus pumping the price of those contracts 1,300% in less than an hour.”
“Riding big, Eisenberg then borrowed against the value of his position and withdrew essentially all cryptocurrency deposits on the Mango Markets platform. He made $110 million, according to the complaint.”
Mango soon began negotiations with Eisenberg and reached an agreement to recover $67 million, Forbes reported.
“All mango depositors will be fixed,” and token holders who vote for the deal agree not to “conduct any criminal investigation or freeze funds once tokens are returned”, said a community post at that moment of shock.
Eisenberg claimed responsibility for the trade, according to the complaint, tweeting on Oct. 15 that “the exchange on which it took place, Mango Markets, became insolvent.”
Furthermore, he tweeted: “I believe all of our actions were open market legal actions, using the protocol as designed, even if the development team did not fully anticipate all the consequences of setting the parameters the way they are.”
In the arrest warrant, the federal agents indicated the following to the judge involved in the case: “I attach complaint 22 Mag. 10337, which accuses Avraham Eisenberg of crimes of market manipulation. The complaint is sealed. Last night, the defendant was arrested in the District of Puerto Rico and will appear later today. Complaint is attached for consideration by the Court.
This is the second arrest in a few days of a person for cryptocurrency fraud, after the arrest of the founder of the FTX platform, Sam Bankman Fried, who was captured in the Bahamas after being charged with numerous federal crimes, including they that of fraud, for having used the deposits of their clients to enrich themselves.
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