An old scam with a modern twist
Key Takeaways
- U.S. prosecutors have likened Avraham Eisenberg’s $110 million Mango Markets exploit to a classic scam updated for the cryptocurrency era.
- Eisenberg was charged with fraud and market manipulation.
- Defense attorneys argue that Eisenberg’s deal was a strategic victory, not fraud.
$110 million alleged abuse by decentralized exchange Mango Markets; The scam, attributed to Avraham “Avi” Eisenberg, has been likened to a traditional scam suited to the cryptocurrency era.
Assistant U.S. Attorney Tian Huang during opening arguments in Manhattan federal court. Eisenberg’s plan was compared to selling fake diamond rings.
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Eisenberg was charged with fraud and market manipulation. They inflated the value of the collateral and then took out loans from Mango’s treasury. sulfur drew a picture Among the alleged crimes:
Consider this scam: Some people sell fake diamond rings, worthless plastic ones. The conman disappears and runs away. This incident is a modern interpretation of this.
Eisenberg came up with the following plan: This is the act of betting on the future price of MNGO tokens and artificially inflating it. When the token soared more than 1,000% in just 20 minutes, he loans were taken against inflated values; They took almost all cryptocurrencies from MNGOs and caused them to collapse.
With this he “Borrow” over $110 million worth of cryptocurrency From what the prosecution sees, Blatant theft.
Conversely, Eisenberg’s attorney, Sanford Talkin, argued that his actions were part of the following: It is a legitimate, high-risk trading strategy that involves significant personal investment and exposure. Talkin also framed this attack as follows, arguing that Eisenberg’s trading was transparent and open to rebuttal from other market participants. A strategic maneuver rather than a scam.
The lawyer also highlighted the following facts: Eisenberg returned $67 million to Mango Markets within days of the exploit. It suggests he has good intentions. He concluded:
does not deny that he made these transactions. He doesn’t deny that he made a profit. However, he denies that he committed the crime because he is accused of doing so. He implemented a successful trading strategy. He is innocent.
The final ruling could go far beyond the courts and impact the regulatory approach and operating practices of the cryptocurrency industry as a whole.
In other news related to cryptocurrency exploits, former takeaway employee Jian Wen was recently found guilty of laundering $2 billion in Bitcoin.
With a master’s degree in Economics, Politics, and Culture in East Asia, Aaron wrote a scientific thesis analyzing the differences between Western capitalism and collective capitalism after World War II.
With nearly 10 years of experience in the fintech industry, Aaron understands all of the biggest issues and challenges cryptocurrency enthusiasts face. He is a passionate analyst with an interest in data-driven and fact-based content, as well as content targeting both Web3 native users and industry newcomers.
Aaron is our go-to guy for all things digital currency. With a huge passion for blockchain and Web3 education, Aaron is working to transform the space as we know it and make it more accessible to complete beginners.
Aaron has been quoted in several popular media outlets and is a published author himself. In his spare time, he enjoys researching market trends and looking for the next supernova.
