Mango Markets sues Avraham Eisenberg for $47 million in damages

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Mango Labs LLC, the company behind Mango Markets and its native MNGO token, is suing Avraham Eisenberg, who drained the platform of $114 million in worth of assets in October by manipulating the price of its tokens.

The Tuesday filing by Mango Labs, with the Southern District of New York, accuses Eisenberg of a “brazen attack” involving conversion, fraudulent misrepresentation and unjust enrichment and seeks $47 million in damages, plus interest, starting from the time of the attack.

After admitting to the attack shortly after committing it—although he claimed it was a smart and legal trading strategy—Eisenberg later proposed a deal which would see him return $67 million of the $110 million assets drained, with him keeping the rest, as long as Mango Markets agreed not pursue criminal investigations against him.

The company initially agreed, in order to regain some of the platforms assets, but it now appears it is going after the rest, and in the process is asking the court to rescind the agreement between itself and Eisenberg, claiming: “He 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.”

This emboldened move by Mango Labs is most likely inspired by recent criminal cases brought against Eisenberg, coming as it does less than a week after the Mango attacker was charged by the U.S. Securities and Exchange Commission (SEC) with violating anti-fraud and market manipulation provisions of the securities laws, and three weeks after it was charged with similar offences by the Commodity Futures Trading Commission (CFTC).

Eisenberg currently remains in custody, after his December arrested in Puerto Rico, and his start to the year has gone from bad to worse—facing as he is fraud and market manipulation charges from the Department of Justice (DoJ), the CFTC and the SEC, and now a civil suit from Mango Labs worth millions of dollars.

The Mango Markets attack

Mango Markets is a Solana-based exchange governed by a decentralised autonomous organisation (DAO) made up of holders of its native token, MNGO.

As noted by Mango Labs in its filing, on October 11, 2022, Eisenberg “manipulated the value of the Mango token (MNGO),” leading to what the exchange described at the time as “a total draining of all equity.”

After he revealed himself, in what Mango Labs described as “bragged about his attack soon after on Twitter,” Eisenberg proposed the questionable deal with the platform to return a portion of the assets drained.

If the court deems this deal void, potentially extortion, Eisenberg could be facing a hefty pay out to Mango Labs, and depending on the outcome of his criminal cases, a lengthy spell behind bars also awaits.

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