Accused Mango Markets Exploiter Wants to Keep $47M in Disputed Funds: Court Filings

Avraham Eisenberg claims he need not return any more than the $67 million of the $114 million worth of tokens he gained using a complicated trading system.

AccessTimeIconFeb 16, 2023 at 11:24 a.m. UTC
Updated May 9, 2023 at 4:08 a.m. UTC

Crypto trader Avraham Eisenberg is seeking to keep some of the funds he is accused of draining from decentralized autonomous organization (DAO) Mango Markets in October.

Eisenberg claims he does not need to return any more than $67 million of the $114 million worth of tokens he gained using a complicated trading system, according to a court filing dated Feb. 15.

Mango Markets is taking legal action to seek the rest of the money claiming fraudulent misrepresentation and unjust enrichment among other claims. It also filed an application for a temporary restraining order and preliminary injunction.

Eisenberg is arguing that the DAO previously decided the matter was closed following a settlement agreement between the two parties. Thus, he is seeking for the restraining order to be dismissed, claiming that Mango should be required to post a bond equal to the present value of the currency restrained.

The disagreement is over the legitimacy of a governance vote that Mango Markets passed in order to retrieve a portion of Eisenberg's exploit funds. Mango Labs, which is representing the DAO in court, says that contract, which let Eisenberg keep much of his haul in exchange for a promise not to sue him, is void because Mango voters agreed to it under duress.

His legal team say the duress argument holds no water and should be discarded. The dueling positions may force the judge in this case to evaluate the particulars of crypto governance – a rare clash between smart contract law and actual law.

Eisenberg also faces legal action by the U.S. Commodity Futures Trading Commission (CFTC) on market manipulation grounds.


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