Mango Labs, the developer of the DeFi lending protocol Mango Markets, sued Avraham Eisenberg, the exploiter of Mango Markets, for the damages and $47 million he allegedly still holds from the exploit. According to the 11th of October 2022 complaint, Avraham performed a malicious attack on Mango Markets, the Solana-based platform. He executed this attack by manipulating the value of the MNGO, the Mango token, and converted approximately $114 million from depositors of Mango Markets to his accounts.
On the 15th of October, in a Twitter thread posted by himself, Avraham described that he was involved with a team that operated a highly profitable trading strategy. In the Twitter thread, he claimed that the exploit was carried out with legal open market actions by using the protocol as designed. This lawsuit against Avraham seeks to nullify an agreement between the Mango DAO and Avraham, on which he returned $67 million of the total $114 million in the days after the exploit.
However, with this agreement, the Mango DAO, the decentralized autonomous organization that governs the Mango Markets, said that if Avraham fulfills this agreement, it will not pursue any criminal investigations or freeze funds. The lawsuit against Avraham alleges that due to the $10 million insurance fund of the Mango DAO for such attacks being insufficient to cover the losses of depositors, the organization was forced to accept the agreement under pressure.
Despite Avraham’s attempt to indemnify himself in the settlement agreement with Mango DAO, the Department of Justice arrested him on the 27th of December on charges of commodities fraud and manipulation. And on the 9th of January, another CFTC, the Commodity Futures Trading Commission, brought its charges against Avraham. The CFTC blamed him for two counts of market manipulation. Moreover, last week, SEC, the US Securities and Exchange Commission, also charged Avaraham with violation of numerous provisions of the federal securities laws. And now Avraham is facing more than three lawsuits against him for the Mango Market exploit.