U.S. Federal prosecutors are seeking an 6-year prison sentence for Avraham "Avi" Eisenberg, the hacker behind the the notorious $110 million exploit of decentralized exchange Mango Markets.

Eisenberg was found guilty in April 2024 of wire fraud, commodities fraud, and market manipulation after orchestrating a sophisticated scheme in October 2022 that manipulated Mango’s native token (MNGO) and associated futures contracts.

He is also facing separate charges related to possession of child pornography, which prosecutors argue further justifies a lengthy prison term.

A trading strategy or premeditated attack?

On October 11, 2022 Mango Market reported that is had suffered an attack which drained $110 million from its treasury.

Shortly after the attack, Avraham Eisenberg came forward as the perpetrator, asserting that the exploit was legal and he was just executing a highly profitable trading strategy that was within the boundaries of legality and the protocol's intended design.

Apparently, Eisenberg used false identities and disguised his location, opening an FTX account using a Ukrainian woman's passport and bypassing KYC checks on AscendEX by selecting a no-verification option and masking his IP as being in Poland.

Prosecutors also highlighted that his attack was a premeditated, pointing to the discord chats where Eisenberg outlined his plans in advance, describing how he would "buy a ton, massively increase the price and borrow on lending," adding that you don't need to sell-you can just let the loan stand.

While Eisenberg's legal team tried to argue this was a legitimate trading strategy, it was later found that Eisenberg researched fraud laws before the attack and fled to Israel hours after being identified online.

Eisenberg's action led to more than just monetary loss, but it also led to the collapse of Mango market. Early this year, the DeFi trading platform announced it would be ceasing operations following a settlement with the Securities and Exchange Commission and prior to the hack in 2022.

Eisenberg's ranson note

Following the exploit, Eisenberg returned approximately $67 million to Mango Markets after a community governance vote, but demanded that it was done under the condition that Mango DAO "waive any potential claims" and refrain from pursuing criminal charges.

Prosecutors later framed this move as a ransom note, and not a true act of repentance.

In an April 22 court filing, Mango Markets requested $47 million in restitution, stating that while the damage to its reputation and community cannot be undone, returning the funds is critical to helping the community recover.

But it seems that even with the payback, its already too little too late as the attack has already caused irreversible damage and forced Mango Markets to shut down permanently.

Prosecutors later said

"Although Eisenberg's attack cannot be undone, returns of the funds he misappropriated is critical to righting his wrong."

In the X post, Mango Market announced they would be shutting down on 13 January 2025 as the platform would no longer be able to sustain future operations economically.

Because of how heinous and destructive his actions were, prosecutors deem that a severe sentence should be given to Eisenberg.

"Fraud that takes over $100 million from investors and effectively shuts down a business is a shocking violation of criminal law. This sentence, if necessary, to reflect the gravity of the defendant's crimes, deter future misconduct and protect the public. "

Eisenberg’s sentencing, scheduled for May 1, 2025, has been delayed several times due to the complexity of the case.

In addition to the Mango Markets charges, Eisenberg faces separate allegations of possessing child pornography which was discovered during a search related to the charges of market manipulation and fraud.

Police discovered that Eisenberg's cell phone and laptops found images depicting prepubescent minors under the age of 12.