Trader convicted of Mango Markets fraud in first US crypto manipulation case

NEW YORK, April 18 (Reuters) - A cryptocurrency trader was convicted of fraud on Thursday, after prosecutors accused him of stealing about $110 million by rigging the Mango Markets exchange.

Jurors in Manhattan federal court found Avraham Eisenberg, 28, guilty of commodities fraud, commodities manipulation and wire fraud, in what the U.S. Department of Justice called its first criminal case involving cryptocurrency market manipulation.

Lawyers for Eisenberg did not immediately respond to requests for comment. He had argued that his trades were legal, and that he made no attempt to deceive anyone. The jury deliberated for less than a day.

Mango is a decentralized platform run by Mango DAO that lets investors lend, borrow, swap and use leverage to trade cryptocurrencies.

According to prosecutors, Eisenberg used two accounts on Oct. 11, 2022 to simultaneously buy and sell futures based on the relative values of Mango's token MNGO and the stablecoin USD Coin.

Prosecutors said Eisenberg's manipulative trades drove up the value of his contracts 1300% in 20 minutes, enabling him to borrow against his holdings and ultimately withdraw $110 million of various cryptocurrencies.

He soon agreed to return $67 million in exchange for other token holders not seeking to have him prosecuted or freeze his assets.

Eisenberg was arrested on Dec. 26, 2022 in San Juan, Puerto Rico, where he lived, and has since been jailed after prosecutors called him a flight risk.

He could face 20 years in prison at his scheduled July 29 sentencing, but would likely get less.

The verdict followed the March 28 sentencing of Sam Bankman-Fried, the founder of now-bankrupt FTX cryptocurrency exchange, to 25 years in prison for stealing $8 billion from customers.

The case is U.S. v. Eisenberg, U.S. District Court, Southern District of New York, No. 23-cr-00010. (Reporting by Jonathan Stempel in New York Editing by Bill Berkrot)