In a recent court filing, Mango Labs has sued the accused trader for $47M for manipulating MNGO token’s price in the Mango markets, creating an uncertain situation for stakeholders.
The crypto market has been a significant industry in executing massive exploits, hacks, and token manipulation. In recent weeks, the crypto sphere has been rocked by allegations of token manipulation, with several high-profile cases coming to light. One of the most notable cases is the MNGO token manipulation which took place in October last year. However, The US Securities and Exchange Commission (SEC) sued the alleged trader Avraham Eisenberg for being responsible for the attack on the crypto trading platform Mango Markets that paved the way for him to steal $116 million in digital assets. Moreover, Mango Labs, the parent organization behind Solana-based DeFi platform Mango Markets, has now decided to sue the trader for $47 million in damages with interest since the attack.
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Eisenberg Faces $47 Million Lawsuit From Mango Labs
The accused, Avraham Eisenberg, now faces trouble from both the SEC and Mango Labs for allegedly running a token scam in the Mango markets. According to a court filing on 25 January, the United States District Court for the Southern District alleges Eisenberg for exploring the Mango markets and frauding millions of dollars worth of crypto in October 2022.
In its Federal lawsuit, Mango Labs stated that the hacker had agreed to return $67 million of the stolen funds. However, the platform wants all the money back and sues the exploiter for $47 million.
In a separate filing previously, the US Securities Commission and the U.S. CFTC had sued the trader for the MNGO token manipulation. The trader now faces parallel criminal charges as both agencies accused him of the MNGO token scam. Last month in December 2022, officials from the authority arrested Eisenberg in Puerto Rico; however, it’s not yet clear whether he has been moved to New York.
Mango Labs also asked the court to abort an agreement between Eisenberg and Mango’s related DAO and requested to declare it as “unenforceable and invalid.” The agreement was a government proposal submitted by Eisenberg in which it asked the DAO to allow them to keep $47 million, and Mango markets wouldn’t be able to apply any criminal charges on this. Regarding this, Mango Labs stated, “Eisenberg was not engaged in lawful bargaining. Eisenberg forced Mango DAO to enter into an unenforceable settlement agreement under duress-purporting to release depositors’ claims against him and precluding them from pursuing a criminal investigation.”
Another Concern In The Crypto Market
In October 2022, Avraham Eisenberg used two separate accounts to manipulate the MNGO token’s price on the Mango Markets DeFi platform through perpetual swaps, which are futures trades that allow users to keep their positions open. Through this method, Eisenberg managed to skyrocket the token’s price by 1300% in just 20 minutes and cash out with a lucrative amount. Unfortunately, after this, the price of MNGO tokens plunged to 2 cents, forcing Mango Markets to suspend its operations on the same day.
Mango Markets has also accused Eisenberg of attacking the crypto platform Aave as it said, “Since the attack, the defendant has continued to plot to attack Mango Markets further, in public, and has used the converted funds to attack other cryptocurrency protocols as well.”
The rise in token manipulation has led many in the cryptocurrency community to call for greater market regulation. Some argue that stronger oversight is necessary to protect investors and prevent fraud, while others warn that overregulation could stifle innovation and harm the industry.
For now, it remains to be seen how the situation will play out. But one thing is sure: token manipulation is a serious issue that will require a concerted effort from all stakeholders to address. The last year saw some of the biggest hacks in the DeFi space, resulting in a wipeout of over $4 billion alone in hacks.