Eisenberg, a 27 year-old US citizen was arrested and detained at MDC Guaynabo, Puerto Rico. He is awaiting transport to appear before the Southern District of New York. There, he is facing parallel criminal and civil charges. These are brought by the Department of Justice and the Commodities Futures Trading Commission (CFTC), respectively. According to the SEC’s complaint, beginning on October 11, 2022, Eisenberg engaged in a scheme to steal approximately $116million worth of crypto assets from the Mango Markets platform.
The complaint alleges that Eisenberg, while living in Puerto Rico, wrongly inflated the value of the MNGO token. He used an account that he controlled on Mango Markets to sell a large amount of perpetual futures for MNGO tokens. He would consequently use a separate account on Mango Markets to purchase those same perpetual futures.
The complaint further alleges that Eisenberg then engaged in a series of large purchases of the thinly traded MNGO token. He did this to artificially raise the price of MNGO token relative to the crypto asset USD Coin.
The complaint also alleges that, as a result of these transactions, the price of MNGO perpetual futures on Mango Markets increased. These included those held by Eisenburg. According to the complaint, Eisenberg used the increased value of his MNGO perpetual futures position to borrow and withdraw approximately $116million worth of various crypto assets from Mango Markets. He effectively drained all available assets from the Mango Markets platform.
No crime too small
David Hirsch, chief of the crypto assets and cyber unit said:
“As we allege, Eisenberg engaged in a manipulative and deceptive scheme to artificially inflate the price of the MNGO token. It was purchased and sold as a crypto asset security, in order to borrow and then withdraw nearly all available assets from Mango Markets. This left the platform at a deficit when the security price returned to its pre-manipulation level.
“As our action shows, the SEC remains committed to rooting out market manipulation. Regardless of the type of security involved.”
The SEC’s complaint, filed in federal district court in Manhattan, charges Eisenberg with violating anti-fraud and market manipulation provisions of the securities laws. It seeks permanent injunctive relief, a conduct-based injunction, disgorgement with prejudgment interest, and civil penalties.
The SEC’s ongoing investigation is being conducted by Kristin Pauley of the crypto assets and cyber unit. Additional assistance in the investigation was provided by Thomas Bedkowski of the crypto assets and cyber unit. Furthermore, the SEC’s litigation will be led by Alyssa Qualls of the Chicago Regional Office. Finally, the matter is being supervised by Amy Flaherty Hartman, Jorge Tenreiro, Mr. Hirsch, and Carolyn Welshhans.
The SEC appreciates the assistance of the US Attorney’s Office for the Southern District of New York, the FBI, and the CFTC.
Kristina Taylor is a highly knowledgeable journalist who has been following the financial news and cybercrimes space since 2011. She holds a degree in communication and media studies from Aarhus University and has always had a passion for writing.
Throughout her career, Kristina has become a well-traveled journalist within the industry and has contributed to many well-known publications. She has a keen eye for detail and is often found poring over white papers to gain deeper insights into the latest trends and developments.
Kristina’s extensive knowledge and experience in the field of finance and technology make her an invaluable contributor to Financial Magazine. She is highly respected in the industry and is known for her ability to break down complex concepts into easy-to-understand pieces for her readers.