It should be noted that the US Securities and Exchange Commission has been paying a lot of attention to what is happening in the cryptocurrency industry lately. Last week, for example, the SEC officially accused Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, of defrauding investors. According to them, Sam had raised around $1.8 billion, but failed to disclose the transfer of funds to trading company Alameda Research.

Sam Bankman-Fried’s accusations from the US Securities and Exchange Commission

Also mid-month, agency officials accused cryptocurrency platforms Gemini and Genesis of unregistered offerings and sales of securities to retail investors.

Despite the activism, not all of the SEC’s attacks end up winning. For example, the regulator never succeeded in its case against Ripple, which was launched in December 2020. The main claim is the allegedly unregistered placement of securities by the company’s representatives.

As Ripple chief executive Brad Garlinghouse said the day before, the company expects to have a ruling on the case as early as 2023. Here’s his quote.

Absolutely, we expect a ruling in 2023. There is really no control over when the judge will deliver the verdict. However, I am optimistic and hope for an end in a matter of months.

That said, as events in recent months show, Ripple is assuming its own victory on this trial.

How cryptocurrencies are stolen

David Hirsch, head of the SEC’s Crypto Assets and Cybercrime Unit, commented on the allegations made by the regulator. Here is his rejoinder, cited by Cointelegraph.

Eisenberg used a manipulative and deceptive scheme to artificially inflate the price of the MNGO token in order to borrow and then withdraw almost all available assets from Mango Markets.


Note that the scheme to manipulate rates of not-so-popular cryptocurrencies for the sake of deceiving blockchain-based lending platforms is quite popular. In this case, an inflated exchange rate of a particular coin used as collateral allows more crypto-assets to be borrowed. The hacker then receives an unfairly large amount and forgets about the collateral, because in effect, he "earns" more. Well, the platform takes a loss in such a scenario.

Note that a hedge against such manipulations is the use of popular oracles like Chainlink. Their task is to provide the platforms with truthful data from various sources, which in addition is confirmed by independent players. This allows you to spot a case of artificial overvaluation and avoid financial losses.


Unchained podcast cover with Abraham Eisenberg

According to Cointelegraph sources, the attacker made a deposit of USD 5 million from his funds to manipulate the price of the MNGO token. He opened a leveraged margin position in perpetual futures. Due to low spot market liquidity, the MNGO price briefly jumped from $0.038 to $0.91 – that is about 2,295 percent.

Increase in MNGO token price on the day of the Mango Markets platform hack

Consequently, Eisenberg’s collateral value also went up – which he used to borrow and withdraw coins from the platform. He was no longer interested in what happened to the collateral, as its fair value was much lower.

Coin borrowing in the Mango Markets platform hack

Shortly afterwards, the Mango Markets team tweeted, warning users not to deposit until the situation was “cleared up” and asking the hijacker to contact them to discuss the bounty issue. They did manage to reach an agreement – the Mango Markets community voted for a reward of $47 million, while the remaining $69 million was returned to the platform.

DAO Mango Markets vote on remuneration issue

The attack on Mango Markets was a coordinated effort by the team led by Eisenberg – a detail that was revealed after his arrest in October 2022. FBI agent Brandon Rach left the following comment on the detention operation.

Eisenberg was involved in a scheme involving the deliberate and artificial manipulation of the price of perpetual futures contracts on a cryptocurrency exchange called Mango Markets.

The suspect himself claimed that there was essentially nothing illegal about his actions. However, US authorities felt otherwise – Eisenberg’s actions caused losses for the platform, so they could well be classified as fraud.


This case could be considered significant. It clearly showed that hacking a cryptocurrency platform will not go unpunished if the perpetrators are identified. It is also essentially about making the digital asset industry more relevant in the eyes of regulators. Perhaps what is happening here can be compared to the first verdict in the cryptocurrency insider trading case. Recall that the case involved a Coinbase exchange representative and his relative.


Cryptocurrency hacker

We believe that the SEC charges against the cryptocurrency hacker could be the beginning of a new story in the world of digital assets. Such actions by regulators clearly show that hackers of decentralised platforms cannot escape punishment if identified. Perhaps the new rhetoric will make other attackers think twice before carrying out illegal activities. Well, it will help improve the reputation of blockchain platforms in general.

What do you think about this? Share your opinion in our Millionaire Crypto Chat. There we will discuss other important news affecting the decentralised asset industry.