Mango Markets Wants Eisenberg To Pay Up, His Lawyers Say the “Matter Was Settled”
At issue is whether a DAO-voted settlement can be considered legally binding
Dall-e modified by Blockworks
Avraham “Avi” Eisenberg, exploiter of DeFi protocol Mango Markets, is looking to retain a portion of the cryptocurrency he managed to gain from manipulation of the price of the Mango token (MNGO).
Eisenberg’s attorneys filed a motion Wednesday opposing the protocol’s lawsuit that seeks $47 million in damages from Eisenberg whose self-proclaimed “profitable trading strategy” netted him tens of millions in October.
“Mango Labs never explains in the [Preliminary Injunction] Motion where it came up with the amount of $47 million,” the attorneys said in the motion, adding that the protocol waited more than three months after the events and after the “matter was settled.”
Mango Markets, a Solana-based DeFi platform, was drained of over $100 million in October. Mango said the hacker, Eisenberg, was able to drain funds via an oracle price manipulation.
Eisenberg purportedly used two addresses to manipulate the price of MNGO — Mango’s native token and collateral asset — from $0.04 to a peak of $0.91. This allowed him to borrow heavily against the inflated MNGO collateral, to the tune of about $114 million.
He proposed, via the Mango DAO governance forum, to return a portion of the funds including Marinade-staked Solana (mSOL), native SOL and the MNGO token, but claimed the rest as a bounty. But Eisenberg offered recompense of $67 million to make users whole on the condition that Mango wouldn’t push for criminal charges.
Mango DAO voters then agreed to a proposal that would allow Eisenberg to retain $47 million of the originally stolen amount, as long as he would return the remainder.
The new civil lawsuit implies the October vote was meaningless. Eisenberg’s lawyers disagree.
“Per the Settlement Agreement, Mr. Eisenberg transferred funds totaling approximately $67 million to Mango Markets,” his attorneys said. “Several weeks later, eligible Mango Markets’ members received reimbursement from the Mango Markets treasury.”
However, in its own lawsuit, Mango said Eisenberg schemed to protect his ill-gotten gains by forcing the protocol “under duress” to a settlement agreement.
Eisenberg’s attorneys argue the only explanation for the “improper three-month delay” is that Mango is attempting to take advantage of Eisenberg’s arrest.
He was arrested in Puerto Rico in December, after which US prosecutors charged Eisenberg with commodities fraud and market manipulation.
Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.
Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.
The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.
