A man who authorities say publicly admitted to manipulating trading on decentralized exchange Mango Markets and draining more than $110 million of cryptocurrency is now facing U.S. criminal and civil charges, the Wall Street Journal reported. The man, Avraham Eisenberg, a 27-year-old resident of Puerto Rico, made his first court appearance Thursday afternoon at the federal court in Manhattan after being arrested on Dec. 26 in San Juan, Puerto Rico, the Justice Department said. He faces charges of commodities fraud, commodities market manipulation and wire fraud in connection with what prosecutors said was manipulation of Mango Markets. Eisenberg remained in police custody on Thursday and will be arraigned Feb. 14, when he would be asked to enter a plea. Brian Klein, a lawyer representing Mr. Eisenberg and a partner at law firm Waymaker LLP, said they are trying to work out a bail package with the prosecutors. The Securities and Exchange Commission and the Commodity Futures Trading Commission filed parallel civil charges against Mr. Eisenberg last month. The CFTC, which regulates derivatives markets, said the enforcement action against Eisenberg was the first of its kind against an alleged manipulation scheme involving a decentralized exchange. Prosecutors in the Southern District of New York alleged that Eisenberg made about $110 million last October through a fraudulent scheme that manipulated the price of certain perpetual futures contracts on Mango Markets’ own crypto token, named MNGO. Eisenberg allegedly used an account he controlled on Mango Markets to sell a large amount of perpetual futures for MNGO tokens and used another account on the exchange to purchase those same futures. He allegedly artificially pumped up the price of MNGO on three different digital asset exchanges that Mango Markets used to determine the value of the derivative contracts. Eisenberg then used the higher value of his MNGO futures positions to borrow and withdraw about $110 million of various digital assets from Mango Markets that effectively drained the platform of most of the assets that had been deposited by other users, prosecutors said.
