DeFi Trader Eisenberg ‘Wasn’t Borrowing, He Was Stealing,’ Prosecutor Says in Opening Argument

At issue is the October 2022 trade where Eisenberg turned $13 million of crypto into $110 million by draining the trading venue Mango Markets of all of its assets, in part by trading against himself.

He did so by making a massive bet on the future price of MNGO tokens and then allegedly gaming the crypto markets to drive up their value. Once the token was up over 1,000% he borrowed against their inflated value to capture virtually all of the crypto on MNGO, rendering it insolvent.

These kinds of trades aren’t allowed at the banks, swaps shops and equities exchanges that power traditional financial markets and are closely regulated in the U.S. Mango Markets isn’t like those institutions; rather than a company, it’s a set of computer programs that operate on a blockchain where the old rules don’t so easily apply.

But they should, according to federal prosecutors bringing this landmark criminal case against Eisenberg, the first crypto trader facing potential jail time for allegedly breaking commodities rules while trading in DeFi.

Source: DeFi Trader Eisenberg ‘Wasn’t Borrowing, He Was Stealing,’ Prosecutor Says in Opening Argument