- The accused exploiter Avraham Eisenberg launched legal efforts to retain $47 million in digital assets hacked from the DeFi platform Mango Markets.
- Eisenberg’s legal team argued that the two parties had agreed for the alleged attacker to keep the funds while returning $67 million out of the $114 million reported stolen.
- Mango Labs countered this claim, saying that the governance vote backing this agreement was made “under duress” and that users had no choice.
The accused Mango Markets’ exploiter Avraham Eisenberg launched legal efforts to retain $47 million in digital assets hacked from the DeFi platform back in October 2021. Eisenberg’s legal representative argued that both parties agreed on the funds to be returned and the assets to be kept by the alleged hacker, per a court filing on Wednesday.
Mango Markets, a decentralized exchange developed by Mango Labs, was hacked for roughly $114 million in October. Avraham Eisenberg then admitted to the exploit a few days later on Twitter. Eisenberg claimed that he and his team deployed “a highly profitable trading strategy”, suggesting that he gamed the protocol rather than hacked the DEX.
At the time, Mango Markets agreed to let Eisenberg and his team keep a portion of the stolen funds. The decentralized autonomous organization (DAO) that governs Mango’s exchange reportedly passed a vote to this effect amid the debacle.
Eisenberg and his team would return $67 million out of the $114 million stolen from the platform as part of a settlement agreement. In return, the self-acclaimed “game theorist” would get to keep $47 million of the loot along with his unidentified co-conspirators.
The alleged hacker was later arrested in December in connection to the incident. Prosecutors from the U.S. Commodity Futures Trading Commission and the Department of Justice charged Eisenberg with market manipulation, commodities fraud, and commodities manipulation.
Mango Markets Sues Eisenberg For $47 Million, Hacker Files Counter Claims
Mango Labs, the entity behind Mango Market, later sued Eisenberg for the remaining $47 million in January. Court filings made at the time said that the company was suing Eisenberg for damages. The company also claimed that the governance vote which initially agreed to let Eisenberg and his team keep a part of stolen funds was made under duress.
On Wednesday, Eisenberg’s legal team countered the motion in court and said there was no evidence to support this claim.
Mango Labs offers just one argument in favor of voiding the Settlement Agreement—’ duress’. Mango Labs now claims that Mango Markets had ‘no choice’ but to vote in favor of the Settlement Agreement. Mango Labs provides zero evidence in support of this theory.
Eisenberg’s court representatives added that Mango’s recovery efforts came more than three months after the incident, indicating “no true urgency” or “irreparable harm”. The lawyers have now urged the court to allow Eisenberg to keep the $47 million as he faces a criminal trial from the DOJ and civil charges from the CFTC.
Avraham Eisenberg, the man behind a renowned hacking group, has been found guilty of perpetrating digital crimes and stealing millions of dollars worth of cryptocurrencies. The group, known as the Mango Markets Hackers, stole 485000 Bitcoin (BTC) and millions of Ethereum (ETH) from various cryptocurrency exchanges across the world.
The group was active between February 2019 and April 2020. During this period, they managed to steal $47 million worth of cryptocurrencies across Europe, Asia, and North America. Later, the group was dismantled and Avraham Eisenberg was arrested in April 2020.
Several victims of the Mango Markets Hackers reported the crime to the police and Avraham was placed in pre-trial detention. Following the investigation, the court found Avraham and his team guilty of committing digital crimes and ordered them to return the stolen funds. However, Avraham refused to comply and challenged the court’s decision.
He argued that the prosecution failed to prove his direct involvement in the crime. He further claimed that he was only involved in some minor aspects of the cyberattack and was not the mastermind behind the attack. However, the court dismissed his argument and ordered him to pay back the stolen funds.
The case remains ongoing as Avraham has refused to return the ill-gotten funds. Despite his refusal to comply with the court’s orders, he is still facing multiple counts of digital crimes. Under the laws of the Indian Criminal Code, he could be sentenced to years of rigorous imprisonment if found guilty.
It remains to be seen whether Avraham will be able to keep the $47 million loot or not. Meanwhile, the victims of the hack have vowed to continue their legal battle against Avraham and the Mango Markets Hackers to recover their stolen funds.