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Mango Exploit: SEC is also probing Eisenberg – CFTC Commissioner

The SEC scrutinizes Mango exploiter Eisenberg for potential Commodity Exchange Act (CEA) breaches. In a report issued earlier this week, Commissioner Kristin Johnson of the CFTC confirmed the SEC’s probe into the matter, which would run simultaneously with that of the CFTC.

Eisenberg is in detention after criminal accusations by the Department of Justice last month. On Twitter, he denied being liable for depleting most of Mango Markets’ capital, asserting that his trading approach was lawful.

However, authorities accuse him of unlawfully influencing the worth of MNGO (Mango’s native token) to attain considerable unlawful gains.

The Mango Market Exploit

Eisenberg, a digital art merchant, was charged with unlawful manipulation of the MNGO’s price. However, Eisenberg denied committing the crime in a Twitter thread released in October in the heat of the incident.

He wrote, “I was among a team that carried out a favorably valuable trading strategy last week. I believe all our moves follow legal open market proceedings, utilizing the actions as developed, even if the development team did not fully foresee the overall outcome of the platform’s set parameters.” Eisenberg added.

Eisenberg and his squad used a legal trading technique that necessitated an investment of $10 million to take out $114 million from Mango Markets. This “trade” influenced the cost oracle to inflate MNGO’s price three times, from $0.30 to $0.91, enhancing the value of Eisenberg’s collateral and enabling him to request more funds from the protocol.

Mango Markets became insolvent due to the assault, resulting in a risk of liquidation for users due to the protocol’s failure to repay its debt. The SEC’s investigation into Eisenberg’s case is only one of many investigations into potential violations of the CEA.

The CFTC is also involved in the investigation. The CFTC can impose civil and criminal penalties if they find evidence of market manipulation.

They can impose fines, restrict trading activities, and seek restitution for victims of the manipulation. The CFTC can also refer cases to the Department of Justice for criminal prosecution.

The SEC and CFTC’s investigation into Eisenberg’s MNGO price manipulation is one of many investigations into potential violations of the CEA. The SEC and CFTC have been actively enforcing the CEA recently and have successfully uncovered and prosecuted several market manipulation cases.

It remains to be seen what action the agencies will take against Eisenberg, but it is clear that they are taking the allegations seriously. If the SEC or CFTC determines that Eisenberg was illegally MNGO price, he could face significant penalties.