DeFi Exchange Mango's $114M Exploit Was 'Market Manipulation,' Not a Hack, Ex-FBI Special Agent Says
Chris Tarbell, co-founder of crypto investigative firm Naxo, discusses why the theft was more about manipulating the platform's native token than hacking the system.
The $114 million in funds siphoned out of decentralized crypto exchange (DEX) Mango Markets wasn’t the result of a hack, according to former FBI Special Agent Chris Tarbell.
Tarbell, who previously worked at the FBI's cybercrime squad in New York, told CoinDesk TV’s “First Mover” the exploit of Mango Market was “more of a market manipulation.”
“This wasn’t [about] getting into a system and getting unauthorized access,” Tarbell said, referring to the strategy used by the illicit actors.
Earlier this month, exploiters manipulated Mango’s native token, MNGO, via the use of smart contract protocol loopholes. With no centralized entity in place, exploiters capitalized on the opportunity, according to Tarbell.
Tarbell, a cofounder of cybersecurity investigations firm Naxo, added that Mango’s case is unique because in regulated markets an alleged criminal would be arrested. One of the confessed exploiters, Avraham Eisenberg, called the exploit a “high-profit trading strategy” in a tweet before confirming he would return $67 million of the stolen funds.
Tarbell says the crypto industry needs to “clean itself up,” and regulators are likely to step in, “even if crypto doesn't want it to.”
Naxo, which launched this year, focuses on cryptocurrency and other emerging technologies, according to a company statement.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.