The New York City Attorney's Office has requested 6.5 to 8 years (78 to 97 months) in prison for Abraham Eisenberg. In 2022, he withdrew $110 million from the Mango Markets DeFi platform, but not by hacking its code, but by exploiting a vulnerability in the economic logic of the protocol.
Eisenberg conducted transactions with MNGO token futures between two controlled accounts: he sold from one and bought from the other, creating artificial trading activity and inflating the price.
The inflated price of MNGO increased the value of his position, which he used as collateral to obtain loans in other cryptocurrencies on Mango Markets. He withdrew the funds received from the platform.
Immediately after the withdrawal of funds in October 2022, Eisenberg openly wrote on social media about his actions, claiming that they were legitimate and represented a "highly profitable trading strategy." This phrase of his has become a kind of meme in the crypto community.
He later voluntarily returned $67 million. Mango Markets is now demanding that the remaining part of the funds be returned through the court, despite the fact that in 2022 the Mango community voted to allow Eisenberg to keep $47 million.
In April 2024, Eisenberg was found guilty of fraud. Sentencing has been postponed several times and is now scheduled for May 1 this year.
29-year-old Eisenberg has previously denied fraud charges. But the prosecutor's office insists that he was aware of the illegality of his actions because he fled.
Shortly after the Mango deal, Eisenberg left Puerto Rico, where he lived, and flew to Israel. When he returned to Puerto Rico in December 2022, U.S. agents arrested him. Since then, he has been in prison, as the judge considered that Eisenberg could escape.
The US Department of Justice also reported that Hugh Austin, a resident of Long Island, was sentenced to 18 years in prison for cryptocurrency fraud.
A 62-year-old man and his son Brandon posed as crypto brokers and raised $12 million from investors, mostly friends and acquaintances, to "invest in cryptocurrency." According to Decrypt, the son was previously sentenced to four years in prison.
