A federal jury has convicted crypto dealer Avraham Eisenberg of fraud and market manipulation.

The fees stemmed from Eisenberg’s exploitation of Mango Markets, a decentralized finance (DeFi) protocol constructed on the Solana blockchain.

Eisenberg Convicted for Market Manipulation

Eisenberg, 28, was found responsible by jurors in a federal courtroom in Manhattan on prices of commodities fraud, commodities manipulation, and wire fraud.

“Avraham Eisenberg executed a manipulative buying and selling scheme on a cryptocurrency trade, defrauding the trade and its traders out of $110 million,” said Nicole M. Argentieri, head of the Justice Division’s Felony Division.

This marks the U.S. Division of Justice’s first legal case concentrating on cryptocurrency market manipulation.

Mango Markets is a decentralized platform managed by Mango DAO that facilitates the lending, borrowing, swapping, and leveraged buying and selling of cryptocurrencies.

Throughout the trial, prosecutors presented proof that Eisenberg engaged in a manipulative buying and selling technique on October 11, 2022.

Eisenberg reportedly used two accounts to execute simultaneous purchase and promote orders for futures contracts tied to the worth of Mango’s native token, MNGO, and the stablecoin USD Coin. These manipulative trades inflated the worth of his contracts by 1,300% in simply 20 minutes.

Consequently, Eisenberg managed to borrow in opposition to his artificially inflated holdings and withdrew roughly $110 million value of assorted cryptocurrencies.

Regardless of Eisenberg’s claims that his trades have been lawful and clear, the jury’s deliberations concluded in lower than a day. Expressing disappointment, Eisenberg’s legal professional, Brian Klein, introduced plans to pursue post-trial motions to advocate for his shopper.

Eisenberg has since agreed to offer again $67 million on the situation that different token holders kept away from pursuing authorized motion in opposition to him or freezing his belongings.

Eisenberg in Custody Awaiting Sentencing

Following his arrest on December 26, 2022, in San Juan, Puerto Rico, the place he resided, Eisenberg has remained in custody after prosecutors argued that he posed a flight threat.

Government Assistant Director Timothy Langan of the FBI’s Felony, Cyber, Response, and Providers Department commented on the case: “When you interact in fraudulent exercise, whether or not that be within the cryptocurrency house or by way of different types of market manipulation, you can be held accountable in your ill-gotten positive aspects.”

He additionally emphasised the company’s dedication to holding people accountable for such fraudulent actions.

Eisenberg’s sentencing is scheduled for July 29, with potential penalties together with a most of 10 years in jail for commodities fraud and manipulation and as much as 20 years for wire fraud.