Avraham Eisenberg was arrested in Porto Rico on December 26 for accusations of fraud and manipulation of raw materials relating to the feat of $ 110 million in the decentralized mango market scholarship. Eisenberg had self-identified as an actor behind what he called a “very profitable negotiation strategy” and insisted that he had taken “legal actions on the open market, using the protocol as designed”.
The arrest of Eisenberg has predictablely illuminated Crypto Twitter, some observers paying particular attention to the fact that accusations of fraud of raw materials were paid in a case involving a piece of crypto:
“Avraham Eisenberg, the defendant, voluntarily and knowingly, directly and indirectly, used and employee, and has tried to use and use, in relation to an exchange, a contract for the sale of a commodity in interstate and foreign trade.”
It looks like the Ministry of Justice calls Mngo and / or CRV products (and not titles) !!!! pic.twitter.com/zklolubr8u
– Scott (@scott_lew_is) December 27, 2022
Eisenberg had manipulated the price of the MNGO part of the exchange compared to the stablecoin of the USDC (USDC), then contracted loans against its warranty. For this, Eisenberg was accused of fraud on raw materials. In the accusations against Eisenberg, the special agency of the US Federal Office of the Investigation, Brandon Racz, wrote:
“I understand that virtual currencies, such as the USDC, are” products “under the law on the exchange of goods.”
Doj: “USDC is a commodity”
Guy: “You see! Shitcoins like Mango is a commodity, that’s what the Doj said.”
This is why you pay lawyers. Do not make your own lawyer at home, you will get Rekt. https://t.co/n9n7k4udzk
– Mike Stroup (@ mikestroup10) December 29, 2022
Understanding the agent that stables are raw materials is only partially supported by government policy, although it cites the McDonnell case pursued by the Future Trading Commission commodities (CFTC). The assertion that the USDC is a commodity is not as controversial as claiming the same thing for Mngo, but may have been a conscious choice.
(4) The fact that the case does not characterize relevant tokens as titles is in no way optimistic / positive and simply results from the litigation strategy – the less predicate problems must plead in its case, better
– _Gabrielshapir0 (@lex_node) December 27, 2022
The legal strategy behind the choice of the doj of the law on the exchange of goods (CEA) to continue the case seemed to be based on the opportunity. On the one hand, the CEA directly addresses price manipulation.
Related: the hackers copied the methods of the mango markets to exploit Lodestar – Certik
In addition, the CFTC is often considered to adopt a softer approach to cryptographic regulations than the dry, although this perception is questionable.
